Q2 2025 West Pharmaceutical Services Inc Earnings Call
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Speaker Change: I would now like to hand, the conference over to your Speaker today, John Sweeney head of Investor Relations. Please go ahead.
Welcome to the Q2, 2025 West pharmaceutical Services earnings conference call.
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Speaker Change: Good morning, and welcome to the Web second quarter 2025 earnings Conference call, We issued our financial results earlier. This morning, and the release has been posted in the investors section of the company's web site located at West Barbara Dot Com.
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Speaker Change: On the call today, we will review our financial results provide an update for our business and our outlook for FY 'twenty five.
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Speaker Change: A slide presentation that accompanies today's call and a copy of the presentation is available on the Investor page.
Speaker Change: Oh, and I like to hand the conference over to your speaker. Today, John Sweeney how to invest regulations. Please go ahead.
Speaker Change: West website.
Speaker Change: On slide four as a safe Harbor statement.
Speaker Change: Shipments made by management on the call and the accompanying presentation contain forward looking statements within the meaning of U S. Federal Securities Law. These.
Speaker Change: Good morning and welcome to West second quarter 2025 earnings conference call. We issued our financial results, early this morning, and the release has been posted in the investor section that company's website located at Westfarms
Speaker Change: Statements are based on our beliefs and assumptions current expectations estimates and forecasts.
Speaker Change: The company's future results are influenced by many factors beyond the control of the company actual results could differ materially from past results as well as those expressed or implied in any forward looking statements made here.
Speaker Change: On the call today, we will review our financial results. Provide an update for our business, and our outlook for FY 255.
Speaker Change: There's a slide presentation that accompanies today's call and a copy of the presentation is available on the investor page of West's website.
Speaker Change: Please refer to today's press release as well as other disclosures made by the company regarding the risks to which the subject, including our 10-K 10-Q and 8-K report.
Speaker Change: On slide 4 is a safe harbor statement statements made by Management on the call and the company presentation contain forward-looking statements within the meanings of US Federal Securities Law.
Speaker Change: During the call management will make reference to non-GAAP financial measures, including organic sales growth adjusted operating profit adjusted operating profit margin and adjusted diluted EPS limitations and reconciliations of the non-GAAP financial measures to the most comparable financial results prepared in conformity to GAAP are provided in this morning's earnings release.
Speaker Change: These statements are based on our beliefs and assumptions current expectations estimates and forecasts.
Speaker Change: The company's future results are influenced by many factors beyond the control of the company, actual results to differ materially from past results, as well as those expressed or implied in any forward-looking statements made here.
Speaker Change: Okay.
Erik: I'll now turn the call over to our CEO Erik <unk> Erik.
Erik: Thank you John and good morning, everyone. Thanks for joining us today I'll begin with a review of our performance in the second quarter and discuss the encouraging trends, we're seeing in the business.
Please refer to today's press release as well as other disclosures made by the company regarding the risks to which the subjects including our 10K 10q and 8K reports.
Speaker Change: Bernard will provide our detailed financial review and I will close with some final thoughts.
Speaker Change: Now, let's turn to slide five and look at our Q2 business performance.
During the call management will make reference to non-gaap financial measures including organic sales growth, just at operating profit adjusted, operating profit margin and adjusted diluted, EPS limitations, and reconciliations with the non-gaap financial measures to the most comparable Financial results prepared in Conformity to gaap are provided in this morning's earnings release.
Speaker Change: I am pleased to report that we exceeded our expectations for the second quarter.
Speaker Change: To our CEO, Eric green Eric.
Speaker Change: This was driven by solid growth in HCP components.
Speaker Change: This quarter, our net sales increased nine 2%.
Speaker Change: And six 8% on an organic basis.
Speaker Change: Thank you, John, and good morning everyone. Thanks for joining us. Today, I'll begin with a review of our performance in the second quarter and discuss the encouraging Trends. We are seeing in the business.
Speaker Change: This strong performance was the result of robust GOP, one elastomer growth <unk>.
Bernard: Then Bernard will provide our detailed financial review and I will close with some final thoughts.
Speaker Change: <unk> momentum and HCP conversions impacted by <unk> activity and the continued normalization of customer ordering patterns.
Bernard: Now, let's turn to 55 and look at our Q2 business performance.
Bernard: I am pleased to report that we exceeded our expectations for this second quarter.
Speaker Change: Our improved performance was concentrated in our higher margin businesses, which drove a favorable margin expansion in the quarter.
Bernard: This was driven by solid growth in hvp components.
Bernard: This quarter, our net sales increased 9.2%.
Speaker Change: We believe this quarter underscores west position as the market, leading injectable solutions company, serving some of the fastest growing areas of healthcare.
And 6.8% on an organic basis.
Bernard: This strong performance was a result of robust glp1. Alasmer growth.
Speaker Change: We do this by leveraging our competitive strength.
Bernard: Ongoing momentum in hvp conversions, impacted by 8, Annex 1 activity.
Speaker Change: To help our customers grow their commercialized products and launch new drugs across multiple therapeutic categories.
Bernard: And the continued normalization of customer ordering patterns.
Speaker Change: Moving to slide six our proprietary products segment grew eight 4% on an organic basis in Q2.
Bernard: Our improved performance was concentrated in our higher margin businesses, which drove the favorable margin expansion in the quarter.
Speaker Change: The key driver of this solid performance was <unk> components, which increased 11, 3% in the quarter.
Bernard: We believe this quarter underscores wet position as the market leading injectable Solutions company.
Bernard: Serving some of the fastest growing areas of healthcare.
Speaker Change: To meet the continued growth and GOP, one plunger demand where possible we are leveraging the investments that were made during the pandemic.
We do this by leveraging our competitive strengths.
Speaker Change: <unk> elastomer products accounted for 8% of total company revenues in the second quarter of 2025.
Bernard: To help our customers, grow their commercialized products and launch new drugs across multiple therapeutic categories.
Speaker Change: Our performance also reflected our progress delivering <unk> upgrades and <unk> related revenues.
Moving to slide 6, our proprietary product, segment grew 8.4% on an organic basis in Q2.
Speaker Change: We now have 370 annex one <unk> upgrade projects up from $340 last quarter.
Bernard: The key driver of this solid performance was hvp components, which increase 11.3% in the quarter.
Speaker Change: We continue to view <unk> as a significant multi year opportunity, where we have sustainable competitive advantage as we are the incumbent on these commercialized drugs and have the ability to deliver higher levels of quality at scale.
Bernard: To meet the continued growth and glp1 plunger demand, where possible, we are leveraging, the Investments that were made during the pandemic.
Glp won a lastma products. Accounted for 8% of total company revenues. In the second quarter of 2025,
Speaker Change: As demand for our products continues to improve we are working hard to increase supply to our customers in the quarter. A majority of the customers who have showed growth where those who experience destocking in the first half of the prior year.
Bernard: Our performance also reflected, our progress delivering HPP upgrades and Annex 1 related revenues.
Bernard: We now have 370 Annex 1 HPP upgrade projects up from 340 last quarter.
Speaker Change: While we believe there are some destocking headwinds to work through in generics and to a lesser extent in biologics broadly speaking, we're optimistic that our businesses in these markets are turning back to more normal ordering pattern.
Bernard: We continue to view Annex 1 as a significant multi-year opportunity, where we have sustainable competitive Advantage as we are the incumbent on these commercialized drugs and have the ability to deliver higher levels of quality at scale.
Speaker Change: Looking to the future, we expect biologics to continue to be a meaningful contributor to our long term growth as what's continues to win in the market.
Speaker Change: <unk> participation rate for biologics and Biosimilars is trending above our historical levels year to date and our win rates for small molecules remain in line with past trends.
Bernard: As demand for our products continues to improve. We are working hard to increase Supply to our customers in the quarter, a majority of the customers who have showed growth were those who experience these stockings, and the first half of the prior year.
Speaker Change: We believe we're making progress in improving our ability to meet customer demand and increasing asset utilization.
Bernard: while we believe there are some stocking headwinds to work through in generics and to a lesser extent in biologics, broadly speaking, we're optimistic that our businesses, in these markets are turning back to more normal ordering patterns
Speaker Change: As we previously disclosed one of our <unk> plants in Europe has experienced certain constraints.
Speaker Change: We are proactively executing an initiative to expand capacity through our hiring and training program. We expect that these steps will improve production as the year progresses.
Bernard: Looking to the future. We expect biologics to continue to be a meaningful contributor to our long-term growth as West continues to win in the market.
Speaker Change: The investments made to expand our HCP infrastructure over the past five years continue to provide us with important benefits. This includes five centers of excellence across our global manufacturing network.
Bernard: Less participation rate for biologics and bios is training above. Our historical levels year to date and our win rates for small molecules remain in line with past trends.
Bernard: We believe we're making progress in improving our ability to meet customer demand and increasing asset utilization.
Speaker Change: In North America, two in Europe, and one in Singapore.
Bernard: as we previously, disclosed 1 of our hvp plants in Europe has experienced certain constraints,
Speaker Change: That offer a strong platform for growth as demand for SPP components normalizes.
Bernard: we are proactively executing an initiative to expand capacity through a hiring and training program.
Speaker Change: Because many of these investments now have been made we remain confident that we will be able to drive capital expenditures back to the normal level of 6% to 8% of revenues.
Bernard: We expect that these steps will improve production as the year progresses.
Speaker Change: This level is necessary to support our long term construct.
Speaker Change: And longer term, we have the opportunity to align our manufacturing location with revenues. This includes further network optimization, which we can do through technology transfers.
Bernard: The Investments made to expand our HPP infrastructure over the past 5 years. Continue to provide us with important benefits. This includes 5 centers of excellence across our Global manufacturing Network.
Bernard: To in North America to in Europe and 1 in Singapore.
Bernard: That offer a strong platform for growth as demand for HPP components normalizes.
Speaker Change: These initiatives take about 12 to 18 months and also provide us with a valuable tool to improve service levels and helped mitigate potential impacts from tariffs for both west and our customers.
Bernard: Because many of these Investments now have been made. We remain confident that we will be able to drive Capital expenditures back to the normal level of 6 to 8% of revenues.
Speaker Change: Shifting to standard products.
Bernard: This level is necessary to support our long-term construct.
Speaker Change: Revenues were up 4% most standard products has a strong regulatory moat with over half of them been specced into an FTA or similar regulatory process that being said, we're continuously converting a portion of the standard product base to HCP every year and this business offers west at Cigna.
Bernard: And longer term.
Further Network optimization, which we can do through technology transfers.
Speaker Change: <unk> opportunity as it represents a ongoing pipeline for HCP conversions.
Bernard: These initiatives take about 12 to 18 months and also provide us with a valuable tool to improve service levels and help mitigate potential impacts from tariffs for both west, and our customers.
Speaker Change: Moving to our <unk> delivery devices business, which represents approximately 13% of total company sales on slide seven.
Shifting to standard products.
Speaker Change: In the second quarter revenues increased 30%.
Bernard: Revenues are up 4%. Most standard products have a strong regulatory mold with over half of them being inspected to and FDA or similar regulatory process.
Speaker Change: The majority of the growth in this area was driven by strength in <unk> Crystal Zenith containment and administration systems.
Speaker Change: <unk> delivery devices include smart dose, we continue to evaluate the best path forward for smart dose and we're closely managing the cost base and are in the process of introducing a new automated line in early 2026, which will further enhance the economics of smartphones.
Bernard: That being said, we're continuously converting a portion of the standard product base to hvp every year. And this business offers West, a significant opportunity as that represents a ongoing pipeline for hvp conversions.
Bernard: Moving to our hvp delivery devices business, which represents approximately 13% of total company sales on slide 7.
Speaker Change: Turning to the contract manufacturing segment on slide eight.
Bernard: And the second quarter revenues increased 30%.
Speaker Change: We saw a 5% organic revenue increased in the quarter. This was driven by the initial ramp up stages of our Dublin facility, where manufacturer auto injectors and Pan.
Bernard: The majority of the growth in this area was driven by strength in dickow Crystal Xenith containments and administration systems.
Speaker Change: Serving the obesity and diabetes market.
Speaker Change: This was partially offset by a lifecycle management of our CGM diagnostics device.
Speaker Change: We continue to expect contract manufacturing organic revenues to increase low single digits for the full year of 2025.
Bernard: Hvp delivery devices include smart dose. We continue to evaluate the best path forward for smart dose and we're closely managing the cost base at are in the process of introducing, a new automated line in early 2026, which will further enhance the economics of smart dose.
Bernard: Turning to the contract manufacturing statement on slide 8.
Speaker Change: On slide nine.
Speaker Change: We are updating our full year 2025 guidance as a result of the strong performance in Q2 continue momentum in our <unk> components business and favorable FX environment, we are increasing our organic revenue and adjusted EPS guidance for the full year 2025.
Bernard: We saw a 0.5%, organic Revenue increase in the quarter. This was driven by the initial ramp of stages of our double in facility were manufactured Auto, injectors and pain.
Serving the Obesity and diabetes Market.
Bernard: This was partially off step by life, cycle management of a CGM. Diagnostics device.
Speaker Change: Before I turn the call over to burner I would like to briefly mentioned the announcement made earlier this week regarding the appointment of our new CFO Bob Mcmahon.
Bernard: We continue to expect contract manufacturing organic revenues to increase low single digits, for the full year of 2025.
Bernard: On slide 9.
Speaker Change: Having previously served as the CFO of Agila technologies I'm looking forward to his expertise and experience as part of our west team.
Bernard: We are updating our full year 2025 guidance.
Speaker Change: In the coming months, Bernard and Bob will work together to ensure a seamless transition.
Speaker Change: And with that let me turn it over to Bernard who will provide more details on the quarter burner.
Bernard: As a result of the strong performance in Q2 continued momentum in our hvp components business and favorable FX environment. We are increasing our organic revenue and adjusted EPS guidance for the full year 2025
Bernard: Thank you Eric and good morning, now, let's review the numbers in more detail.
Bernard: We will first look at Q2 2025 revenues and profits.
Bernard: Before I turn the call over to Bernard. I would like to briefly mention the announcement made earlier this week regarding the appointment of our new CFO Bob McMahon.
Bernard: Where we saw increases in organic sales adjusted operating profit and diluted EPS compared to the second quarter of 2024.
Bernard: Having previously served as a CFO of, Agilent Technologies. I'm looking forward to his expertise and experience as part of our West team.
Bernard: In the coming months.
Bernard: I will take you through the drivers impacting sales and margin in the quarter as well as some balance sheet takeaways.
Bernard: Bernard and Bob will work together to ensure a seamless transition.
Bernard: And finally, we will provide an update to our guidance.
Speaker Change: And with that, let me turn it over to Bernard. Who will provide more details on the quarter Bernard.
Bernard: First up Q2.
Bernard: While our financial results are summarized on slide 10, and the reconciliation of non US GAAP measures are described in slides 19 to 22.
Bernard: Thank you, Eric and good morning. Now, let's review the numbers in more detail.
Bernard: We'll first look at Q2, 2025 revenues and profits.
Bernard: We recorded net sales of $766 5 million.
Bernard: Representing an organic sales increase of six 8%.
Bernard: Where we saw increases in organic sales, adjusted operating profit and diluted EPS. Compared to the second quarter of 2024.
Bernard: Looking at slide 11.
Bernard: The primary products organic net sales increased eight 4% in the quarter.
Bernard: I will take you through the driver's impacting sales and margin in the quarter as well as some balance sheet takeaways and finally, we will provide an update to our guidance.
Bernard: Primarily driven by increased <unk> volumes and positive sales price.
Bernard: First up, Q2.
Bernard: High value product, which made up 74% of proprietary product sales in the quarter increased 12, 6% led by customer demand for Westar and Nova choice products.
Bernard: our financial results are summarized on slide 10 and the reconciliation of non-us Gap measures are described in slide, 19 to 222
Bernard: The biologics market unit delivered high single digits organic net sales growth.
Bernard: We record at net sales of 766.5 million representing an organic sales increase of 6.8%.
Bernard: Looking at slide 11.
Bernard: Driven by an increase in sales of Nova choice and <unk> products.
Proprietary products, organic, net sales, increased 8.4% in the quarter.
Bernard: The pharma and generics market units, both increased high single digits, primarily due to an increase in sales of westar products.
Primarily driven by increased hvp volumes and positive sales price.
Bernard: Our contract manufacturing segment experienced a 5% net sales growth in the second quarter, primarily driven by an increase in sales and self injection devices for obesity and diabetes.
Bernard: High value products, which made up 704% of proprietary product sales in the quarter increased 12.6% led by customer demand for Westar and Nova Choice products.
Bernard: We recorded $273 9 million and gross profit.
Bernard: The biologics market unit delivered, High single digits organic, net sales growth.
Bernard: Which was $43 9 million or 19, 1% higher than Q2 of last year.
Bernard: Driven by an increase in sales of Nova choice and dickow CZ products.
Bernard: And our gross profit margin of 35, 7% with a 290 basis points year over year increase.
The Pharma and generics Market units, both increased High single digits.
Bernard: Primarily due to an increase in sales of Western our products.
Bernard: Our adjusted operating profit margin of 23% with an increase of 230 basis points from the same period last year.
Our contract manufacturing segment, experience, 0.5% net sales growth in the second quarter.
Bernard: Primarily driven by an increase in sales in self- injection devices for obesity and diabetes.
Bernard: Finally, I just adjusted diluted EPS increased 21, 1% for Q2, excluding stock based compensation tax benefits.
Bernard: We recorded 273.9 million in Gross profits.
Bernard: 9 million or 19.1% higher than Q2 of last year.
Bernard: <unk> improved by 26, 4% compared to the same period last year.
Bernard: Now, let's review the drivers in both our revenue and profit performance.
Bernard: And our gross profit margin of 35.7% with a 290 basis. Point year-over-year, increase
Bernard: On slide 12, we show the contributions to organic sales increase in the quarter.
Bernard: Sales price increases contributed $14 6 million.
Bernard: Our adjusted operating profit. Margin of 20.3% was an increase of 230 basis points from the same period last year.
Bernard: Our two one percentage points of growth in the quarter.
Bernard: In addition to price there was a positive volume and mix impact of $33 3 million.
Finally, I just adjusted diluted EPS increased 21.1% for Q2.
Bernard: Driven by greater demand for Westar, and <unk> choice products, and a foreign currency tailwind of $16 5 million.
Bernard: Excluding stock-based compensation tax benefits EPS improved by 26.4% compared to the same period last year.
Bernard: Now, let's review the drivers in both a revenue and profit performance.
Bernard: Looking at margin performance slide.
Bernard: <unk> shows our consolidated gross profit margin of 35, 7% for Q2 2025 up from 32, 8% in Q2 2024.
Bernard: On slide 12, we show the contributions to organic sales increase in the quarter.
Bernard: Sales price increases contributed 14.6 million.
Bernard: Or 2.1% points of growth in the quarter.
Bernard: Proprietary products' second quarter gross profit margin of 41% with 310 basis points higher than the margin achieved in the second quarter of 2024.
Bernard: The key driver for the increase in proprietary products gross profit margin. In addition to sales price was higher plant efficiency and output driven by increased customer demand for our <unk> products.
Bernard: In addition to price, there was a positive volume and mix impact of 33.3 million driven by greater demand for Westar and Nova Choice products, and a foreign currency Tailwind of 16.5 million.
Looking at margin performance.
Bernard: Contract manufacturing second quarter gross profit margin of 17, 5% was 130 basis points greater than the margin achieved in the second quarter of 2020 for.
Bernard: Flight, 13 shows our Consolidated growth profit, margin of 35.7% for Q2, 2025 up from 32.8% in Q2 2024.
Bernard: Primarily due to increased sales prices and positive product mix now.
Bernard: Proprietary products, second quarter, gross profit, margin of 40.1% of 310 basis points higher than the margin achieved in the second quarter of 2024.
Bernard: Now, let's look at our balance sheet and review, how we've done in terms of generating cash for the business.
Bernard: On slide 14, we have listed some key cash flow metrics.
Bernard: Operating cash flow was $306 $5 million for the six months ended June 2025 growth of $23 3 million compared to the same period last year and eight 2% increase.
Bernard: The key driver for the increase in proprietary products, gross profit margin. In addition to sales price was higher, plant efficiency, and output driven by increased customer demand or or hvp products.
Bernard: Primarily due to favorable working capital management.
Bernard: Contract manufacturing second quarter, gross profit margin of 17.5% was 130 basis points greater than the margin achieved in the second quarter of 2024.
Bernard: Our second quarter 2025 year to date capital spending was $146 5 million.
Bernard: Primarily due to increase, sales, prices, and positive product mix.
Bernard: Now, let's look at our balance sheet and review how we've done in terms of generating cash for the business.
Bernard: $44 3 million lower than the same period last year.
Bernard: On flight 14, we have listed some key, cash flow metrics.
Bernard: Working capital of approximately 1.076 billion at June 32025 increased by $88 6 million from December 31, 2024, primarily due to increases in our current assets.
Bernard: Operating cash flow was 306.5 Million for the 6-month end of June 2025 growth of 23.3 million compared to the same period last year and 8.2% increase.
Bernard: Our cash balance at June 32025, or $509 $7 million was $25 1 million higher than our December 2020 for balance.
Bernard: Primarily due to favorable working Capital Management.
Bernard: Our second quarter 2025 year to date Capital spending was 146.5 Million.
Bernard: The increase in cash is primarily due to cash from operations.
Bernard: 44.3 million lower than the same period last year.
Bernard: Offset by $134 million of share repurchases and our capital expenditures.
Bernard: Turning to guidance Slide 15 provides a high level summary.
Bernard: working capital of approximately 1.076 billion dollars of June 30th 2025, increase by 88.6 million from December 31 2024,
Bernard: Based on our strong second quarter results and positive impact of foreign currency exchange, we are increasing our full year 2025 revenue guidance.
Bernard: Primarily due to increases in our current assets.
Bernard: We expect net sales in a range of 3.04 billion to $3 <unk> 6 billion.
Bernard: Our cash balance at June 30th 2025 of 509.7 million was 25.1 million higher than our December 2024 balance.
Bernard: Compared to prior guidance of $2 94, five to $2 97 5 billion.
Bernard: The increase in cash is primarily due to cash from operations?
Bernard: There is an estimated full year 2025 tailwind for approximately $59 million based on current foreign exchange rates.
Bernard: Offset by 134 million of share repurchases and our Capital expenditures.
Bernard: Turning to guidance slide 15 provides a high level summary.
Bernard: Compared to our prior guidance of a headwind of approximately $5 million.
Bernard: We expect organic sales growth to be approximately 3% to 375% compared to a 2% to 3% and our prior guidance.
Bernard: Based on a strong second quarter results and positive impact of foreign currency exchange. We are increasing our full year 2025 Revenue guidance.
Bernard: I would note that there is a mix shift in the updated guidance with HCP components now expected to be up mid to high single digits for the year.
We expect net sales in a range of 3.04 billion to 3.06 billion compared to Prior guidance of 2.945 to 2.975 billion dollars.
Bernard: We are increasing our full year 2025, adjusted diluted EPS guidance to a range of $6 65 to $6 85 up from the previous range of $6 15 to $6 35.
Compared to a prior guidance of a headwind of approximately 5 million.
Bernard: Full year 2025, adjusted diluted EPS guidance assumes 27 tailwind based on current foreign exchange rates.
Bernard: Compared to prior guidance of no foreign currency impact.
Bernard: The updated guidance also includes EPS of <unk> associated with first half 2025 tax benefits from stock based compensation.
Bernard: Our guidance excludes future tax benefits from stock based compensation.
Bernard: Moving onto tariffs based on the tariffs that have been SaaS, we believe the impact to our business for the nine months will be 15 million to $20 million for FY 2025 <unk>.
We are increasing our full year. 2025 adjusted diluted EPS guidance to a range of $6.65 to $6.85 up from the previous range of $6.15 to $6.35.
Bernard: Full year. 2025 adjusted diluted EPS, guidance assumes 27 cents Tailwind based on current foreign exchange rates.
Bernard: Compared to our prior estimate of $20 million to $25 million.
Bernard: However, there is still a lot of uncertainty here and we appreciate that this number could be more or less depending on retaliatory tariffs and other factors.
Bernard: The updated guidance also includes EPS of 4 cents associated with first half 2025, tax benefits from stock-based compensation.
Bernard: We continue to monitor the situation and we are utilizing every available mitigation lever to offset this impact.
Bernard: Our guidance excludes future tax benefits from stock-based compensation.
Bernard: Moving on to tariffs.
Bernard: We are not currently incorporating any estimate for tariff related pass through revenues in our guidance at this point.
Bernard: Based on the tariffs that have been set, we believe the impact, to our business. For the 9 months will be 15 million to 20 million for FY 2025.
Bernard: Moving onto third quarter guidance, we anticipate revenue to be in the range of 785% to $795 million.
Compared to our prior estimate of 20 to 25 million.
Bernard: Which translates to approximately two 5% to three 5% third quarter organic sales growth.
Bernard: However, there is still a lot of uncertainty here and we appreciate that this number could be more or less depending on retaliatory tariffs and other factors.
Bernard: Third quarter adjusted diluted EPS is expected to be in a range of $1 65 to $1 70.
Bernard: we continue to monitor the situation and we are utilizing every available mitigation lever to offset this impact,
Bernard: And as a reminder, our Q3 2024 results include as an approximate $19 million customer incentive payments.
Bernard: We are not currently incorporating any estimate for tariff related, paths through revenues and our guidance. At this point,
Bernard: Our drug delivery device business.
Bernard: That does not recur in Q3 2025.
Bernard: Moving on to third quarter guidance. We anticipate Revenue to be in the range of 785 to 795 million.
Bernard: Excluding the impact of this incentive Q3 organic growth is approximately 5% to 6%.
Which translates to approximately 2.5 to 3.5%, a third quarter, organic sales growth.
Bernard: Lastly, our 2025 Capex guidance is $275 million for the year unchanged from prior guidance.
Bernard: And third quarter, just to diluted EPS is expected to be in a range of 1.65 to 1.70.
Eric: I would now like to turn the call back over to Eric.
Eric: Thanks, Bernard to summarize on slide 16, we are delivering on the financial outlook. We shared with you last quarter and this is reflected in our upward adjustment to guidance.
Bernard: And as a reminder, our Q3 2024 results included an approximate 19 million, customer incentive payment in our drug delivery device business.
That does not recur in Q3 2025.
Eric: Our SVP component business is improving and we see opportunities for increased returns and our contract manufacturing business.
Bernard: Excluding the impact of this incentive. Q3 organic growth is approximately 5 to 6%.
Eric: Our strategy is delivering strong results and gives us confidence that our business can return to achieving our targeted long term growth construct.
Bernard: Lastly, our 2025 capex guidance is 275 million for the year unchanged from prior guidance.
Eric: Specifically, we're seeing improving trends, our most profitable business HCP components, we will continue to capitalize on the opportunities, where we have excellent competitive advantages and unique offerings for our customers.
Eric Green: I would now like to turn the call back over to Eric.
Thanks Bernard to summarize and slide 16. We are delivering on the financial Outlook we shared with you last quarter and this is reflected in our upward adjustment to guidance
Eric: Longer term, we are well positioned to capture the strong demand in the biologics market and benefit from the process improvements underway in <unk>.
Eric Green: Our HBP component business is improving and we see opportunities for increased returns in our contract manufacturing business.
Eric: Closing I would like to thank you for your interest in west.
Eric: And extend my sincere thanks to all of the West team members, who did an outstanding job and contributed to a successful second quarter operator, we're ready to take questions. Thank you.
Eric Green: Our strategy is delivering strong results and gives us confidence that our business can return to achieving our targeted, long-term growth construct.
Eric: As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced.
Eric Green: Specifically, we're seeing improving Trends are most profitable business, hvp components, we will continue to capitalize on the opportunities where we have excellent, competitive advantages and unique offerings for our customers.
Eric: To withdraw your question. Please press star one again.
Eric: In the interest of time, please limit yourself to one question. Please.
Eric Green: Longer term, we're well positioned to capture the strong demand in the biologics market and benefit from the process improvements underway.
Eric: Please standby, while we compile the Q&A roster.
Eric Green: In closing, I would like to thank you for your interest in West.
Eric: Our first question comes from Paul Knight with Keybanc. Your line is open.
Eric Green: And extend my sincere. Thanks to all the West team members, who did an outstanding job in contributing to a successful second quarter.
Paul Knight: Hi, Eric you mentioned that the Crystal Zenith was a component of the growth what was driving crystal Zenith I know you've had this product many years, but is it getting to critical mass or whats the.
Operator. We're ready to take questions. Thank you.
As a reminder.
Eric Green: To ask a question. Please press star, 1, 1 1 on your telephone, and wait for your name to be announced.
Eric Green: To withdraw your question. Please press star 1 1 1 again.
Eric: Dynamics with Crystal Zenith.
Eric: Yes, good morning, Paul.
Eric Green: In the interest of time, we ask that you, please let yourself to 1 question please. Stand by while we compile the Q&A roster,
Eric: Driven by customer demand on a particular drug launch.
Eric: We continue to see interest in Crystal Zenith. So this was encouraging there is some element of timing to that but however, it is increased demand based on particular drug launch.
Paul Knight: Our first question comes from Paul Knight with KeyBank, your line is open.
Speaker Change: Thank you. Our next question comes from Justin Bowers with Deutsche Bank. Your line is open.
Paul Knight: Hi. Uh Eric you mentioned that uh Crystal Zenith was a component of the growth, what was driving uh Krystal Z? As I know you've had this product many years, but is it getting to critical mass or what, what's the, uh, Dynamics with Crystal Venus?
Justin Bowers: Hi, good morning, everyone.
Justin Bowers: A couple of quick quick ones.
Justin Bowers: Eric.
Justin Bowers: Yes.
Justin Bowers: <unk> was particularly strong in the quarter and I think we're anticipating that to be a little more challenged through through the year. So just maybe give us a state of the union on where we are and Destocking in general and then.
Paul Knight: Yeah, good morning, Paul. It's it's driven by uh, customer Demand on a particular drug launch. Um, we continue to see interesting crystals in it. So this was encouraging, there is an element of timing to that, uh, but however, it's just uh, increased demand based on particular drug launch.
Justin Bowers: The second part of that will just be what market conditions to worsen need to see to return to durable high single digit growth.
Speaker Change: Thank you. Our next question comes from Justin Bowers with Deutsche Bank, your line is open.
Justin Bowers: Yes.
Justin Bowers: Yeah, Thanks, Justin and good morning.
Justin Bowers: The generics market, we have seen continued destocking effect in 2025, we expect that to continue somewhat in the second half of the year. We are encouraged with the momentum in the second quarter in that particular market segment. However, we continue to see the destocking effect in that particular area, we mentioned earlier.
Justin Bowers: That in pharma that has dissipated.
Justin Bowers: Last year, and then we're seeing that become more normalized and a ramp up in demand in biologics for the balance of the year really the key growth driver to get to our long term.
Justin Bowers: Hi, good morning everyone. Um, just a couple of quick quick ones, um, Eric that generics was particularly strong in the quarter, and, um, I think we're anticipating, uh, that to be a little more challenged through through the years. So, just maybe give us a state of the union on where we are and destocking in general. And then, um, a second part of that would just be what what market conditions do, uh, does West need to see to return to durable High single digit growth.
Justin Bowers: Growth algorithm.
Justin Bowers: Around the high value product components that is the key driver of growth.
Justin Bowers: It's not just the top line, but also the margin expansion, you're seeing that we mentioned earlier in the year that we will see a build throughout the year.
Justin Bowers: Based on.
Justin Bowers: You think about the key drivers there is DLP one biologics also annex one around <unk> upgrades.
Justin Bowers: And in all three of those will be stronger in the second half than the first half of this year. So there is very good momentum as we build throughout the year.
Justin Bowers: The other generic Market, we have seen uh continued the stock in effect in 2025. We expect that to continue somewhat in the second half of the year. We were encouraged with the momentum in the second quarter in that particular Market segment. However, we we continue to see the the stock in effect in that particular area. We mentioned earlier that in Pharma that that has dissipated um last year and then we're seeing that um become more normalized in a ramp up and demand uh, in biologics for the balance of the year, really, the key growth driver to get to our long-term, uh, growth algorithm is around. The high value product components. That is the key driver of growth,
Justin Bowers: Get back to the normal algorithm of growth that we've had at west for for quite some time.
Justin Bowers: both, not just the top line, but also the margin expansion, you're seeing that
Speaker Change: Thank you. Our next question comes from Larry Solow with CJS Securities. Your line is open.
Justin Bowers: we we mentioned earlier in the year that we will see a build throughout the year, uh, based on
Larry Solow: Great. Good morning, just first of all Bernard a best of luck to you.
Larry Solow: Good to see the business getting back on track here.
Speaker Change: And party I guess first question would be on the on the AD Exelon Ark you mentioned.
Larry Solow: It continues to increase sequentially.
Speaker Change: Q.
Speaker Change: Backlog is that translating.
Justin Bowers: You know, you think about the key drivers, there is glue ons biologics also Annex 1 around HPP upgrades. And in all 3 of those will be stronger in the second half than the first half of this year. So there's there's very good momentum as we build throughout the year. Uh, to get back to the normal algorithm that of growth that we've had at West for for quite some time.
Speaker Change: Translating into actual revenue growth so fast.
Speaker Change: There are a lot of these clients can you just give us kind of a.
Speaker Change: A little more color on that on that.
Speaker Change: Thank you. Our next question comes from Larry solo with CJs Securities. Your line is open
Speaker Change: 90, I think you mentioned imagine Qualcomm at different stages of discussions.
Speaker Change: That translating into revenue.
Larry Solow: Yes, good morning, Larry the unexplored.
Speaker Change: Multi year process.
The interest level by our customers.
Speaker Change: To upgrade current.
Speaker Change: Formulas.
Speaker Change: Through pharmaceutical watching envision inspection sterilization.
Larry Solo: A great. Good morning and uh just first off Bernard best of luck to you. Um good to see the the business getting back on track. Um as your departing. Um, I guess, I guess, first question those would be on the, on the annex 1. Eric you mentioned, um, you know, continues to increase sequentially. At least the, the queue and the backlog is that, you know, translating into actual Revenue growth, so fast, you know, or a lot of these clients. Can you just give us kind of a
Speaker Change: As has increased and Youre correct.
Speaker Change: We had about 370 projects that we have secured in the last quarter built upon and it does take some time to deliver the end results.
Larry Solo: A little more color on that, on that 390 I think you mentioned. Like I imagine it's all kinds of different stages of discussions. Or you know, how's that translating into to revenue?
Speaker Change: Before they become commercialized.
Speaker Change: Execute revenues from these these upgrades.
Yeah, and good morning Larry, the annex 1 is a, is a multi-year process. Um, the the interest level by our customers,
Speaker Change: But very encouraged that we mentioned earlier in the year that we expect about 150 basis points due to annex one and we're pleased with the <unk>.
Speaker Change: The track record, we have so far developed to achieve that.
Speaker Change: So its good momentum.
Speaker Change: As a.
Speaker Change: It's significant.
Speaker Change: Variation between one client to the next when you think about the complexity of the volume.
To upgrade current um formulas. Uh, through pharmaceutical washing Envision inspection sterilization. Uh, is has increased in your correct. We we, uh, had about 370 projects that we have um, secured in the last quarter and built upon and it does take some time to deliver the end results, um, before they become commercialized.
Speaker Change: They are already on this.
Speaker Change: Whether it's standard products for HCP been upgraded.
Speaker Change: So each one is panel.
Speaker Change: Independently and there is there's commonality, but which is moving more towards our higher end of HCP, which is very positive so more to come Larry but its very positive very strong momentum and it will be a contributor of growth for for a number of years.
Larry Solo: Or we actually get revenues from these these upgrades. Um, but very encouraged. We mentioned earlier in the year that we we expect about 150 basis points due to Annex 1 and, and we're pleased with the, the track record we have so far to be able to achieve that. Um, so it's it's good momentum.
Speaker Change: To come.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from Dan Leonard with UBS. Your line is open.
Dan Leonard: And thank you I'm trying to better understand the moving parts of the guidance update specifically it looks like your organic revenue guidance increase was driven entirely by the Q2 B can you didn't change your view for the second half of the year. So is that correct number one and did you see.
Larry Solo: It is a, it's a, it's a it's significant, um, variation between 1 client to the next. When you think about the complexity of the volume uh where they are already on the on the whether it's standard products for hvp being upgraded. Uh so each 1 is handled um independently and there's there is there's commonality but which is moving more towards our higher, end of hvp which is a very positive. So more to come Larry but it's very positive. It's very strong momentum and it will be a contributor to growth for for a number of years, uh, uh, to come
Dan Leonard: Any kind of pull forward dynamic into the Q2 period.
Thank you. Our next question.
Dan Leonard: B the second related part of that question.
Dan Leonard: Yes.
Your line is open.
Dan Leonard: Yes.
Dan Leonard: Hi, Dan.
Speaker Change: Yes, we had built into our original guidance in <unk>.
Dan Leonard: <unk>.
Dan Leonard: Components on readiness, we will starting to.
Dan Leonard: Forecast that we would expect to see stronger growth in the second half of the year and we continue to.
Dan Leonard: That view, where last quarter, we'd say at HCP components will be up mid single digits.
Speaker Change: And thank you. I'm trying to better understand the moving parts of the guidance update in a specifically, it looks like your organic Revenue. Guidance, increase was driven entirely by the q2b and you didn't change your view for the second half of the V of the year. So, is that correct number 1 and and did you see any kind of pull forward Dynamic into the Q2 period?
Dan Leonard: Back to scene it being mid single digit to high single digit growth for the year and higher growth in the second half versus the first half and so we are passing through the beat in Q2, and we remain we remain positive on the second half, particularly around <unk> components.
Speaker Change: Period. Um, that would be the second related part of that question.
Speaker Change: Hi Dan. Um, yeah, we we had built into our original guidance, um, HPP components already. You know, we were starting to
Dan Leonard: On the timing perspective, and pull forward and we didn't really see a lot of that in Q2.
Dan Leonard: The results were driven by.
Dan Leonard: Increased demand around Nova choice products and again we.
Dan Leonard: Called out <unk> products as well so that is true demand in the quarter.
Dan Leonard: And just a modeling point if I may if you look at what happened last year, we had an incentive payment about $47 million. So if you exclude that the implied organic growth for our business would be 5% to 6% in the third and fourth quarter of the year.
Speaker Change: Are passing through the beat and Q2 and we met, you know, we remain positive on the second half, particularly around hvp components.
Speaker Change: Thank you. Our next question comes from Michael <unk> with Bank of America. Your line is open.
Speaker Change: Great. Thanks for taking the question.
Speaker Change: You guys called out GOP, a little bit more.
Speaker Change: Um, on the timing perspective and pull forward. We didn't really see a lot of that in Q2, um, the results were driven by, you know, increased demand around Nova Choice products, and again, with that, that called out daiki ocz products as well. So that is, you know, true demand in the quarter.
Speaker Change: In the quarter. It seems like that drove some of the beat I know there's talk about a lot.
Speaker Change: <unk> customer, they're sort of ramping production.
Speaker Change: Just wondering how.
Speaker Change: You could do to quantify that I know you called out 8% of total sales.
Speaker Change: And last quarter.
Speaker Change: And just a modeling point. If I may if you look at what happened last year, we had an incentive payment about, uh, 47 million dollars. So if you exclude that, the implied organic growth for our business would be 5 to 6% in the third and fourth quarter of the year.
Speaker Change: Wondering if you think that's durable.
Speaker Change: How we should expect that to continue to ramp in the second half.
Speaker Change: Thank you. Our next question comes from
Speaker Change: Michael.
Speaker Change: Yes.
Speaker Change: America, your line.
Speaker Change: Into the GOP contribution thanks.
Michael: Yes, Michael the <unk> contribution is strong we were able to respond to our customers' demand.
Speaker Change: Demand as they.
Speaker Change: <unk> continued to increase.
Speaker Change: Throughout the balance of 2025, I will comment on 2026 at this point in time, but unfortunately, we're in a very good position to be.
Speaker Change: We'll respond to our customers with the.
Speaker Change: Leveraging the assets, we had put in a few years ago during the Covid vaccine pandemic period and.
Speaker Change: Great. Uh, thanks for taking the question. Um, you guys called out GOP a little bit more, um, in the quarter, seems like that drove some of the beat. Um, I know there was talk about, um, a large customer there, um, sort of ramping production. Um, just wondering how, you know, anything you could do to quantify that. I know you called out 8% of total sales, it was, um, 7 last quarter, um, just wondering if you think that's durable, um, how we should expect that to continue to ramp in the second half? Um, yeah, if you could just drill into the the GOP contribution. Thanks.
Speaker Change: And so we're able to respond accordingly to build support them, it's for multiple drugs with NGL key.
Speaker Change: It's different.
Speaker Change: <unk> there are some vials as you know in the marketplace.
Speaker Change: And so that's been a positive growth driver for us, but what's really encouraging and that was an element of the HCP.
Speaker Change: Components growth, but if you look at the first half.
Speaker Change: <unk> components growth on an organic basis.
Speaker Change: Call. It between the first and second quarter was roughly between low single digits to mid single digit.
Speaker Change: When we look at the back half of this year, it's going to be a high single digit to double digit that gets you back to the mid single to high single for the full year. So we expect HCP components to continue to grow for the balance of the year and <unk> is one of the levers, but obviously, we're seeing with the demand that we have.
Speaker Change: Yeah, Michael, the the glp contribution is strong. Uh, we are able to respond to our customers, uh, demand as they continue to increase, uh, throughout throughout the balance of 2025, I won't comment on 2026 at this point in time. But fortunately, we're in a very good position to be able to respond to our customers with the, um, leveraging the assets. We had put in a few years ago during the co vaccine, uh, pandemic, period. And so we're able to respond accordingly. Um, the bill support them, it's, it's for multiple drugs within glp. Um, it, it's different, uh, could be plungers. There are some vials as you know, in the marketplace.
Speaker Change: And so that that's been a, a positive growth driver for us, but what's really encouraging, and that was an element of the hvp, uh, components growth. But if you, if you look at the first half,
Speaker Change: We'll work with their customers in the biologic space and I'll close I mentioned earlier by Larry's question on the annex one and the HP upgrades all look very positive for the balance of the year.
Speaker Change: For hvp components growth on organic bases. It's it's, it's called it between the first and second quarter, it was roughly between low, single digits to Mid single digit.
Speaker Change: Thank you. Our next question comes from Mack <unk> with Stephens. Your line is open.
Speaker Change: Hey, good morning, I appreciate you taking the questions maybe just following up on Larry's.
Speaker Change: The commentary there, but I just want to kind of understanding the additional customers that you've added and they take time to ramp and get get to there.
Speaker Change: When we look at the back half of this year, it's going to be a high single digit to double digit. That gets you back to the mid single to high single for the full year. So we expect hvp components to continue to grow for the balance of the year and glp1 is 1 of the levers. But obviously, we're seeing with the demand that we have uh, we're working with our customers in the bio.
Speaker Change: Full run rate as it were but if we're to look out over 2025 and enter 2026.
Speaker Change: Project space. And also, as I mentioned earlier, by Larry's question around the annex 1 and the HB upgrades all look very positive for the balance of the year.
Speaker Change: I think you've added roughly a 100 and you expected half of lows to contribute to 2025.
Speaker Change: Should that be.
Speaker Change: <unk> as we look towards 2026th growth so.
Mac Ito: Thank you. Our next question comes from Mac Ito with Stevens. Your line is open.
Speaker Change: Customers in 2025 ramping but also the additions.
Speaker Change: The repositions as well.
Speaker Change: It speaks well to counter the future pipeline, but in many of these <unk> projects, we work with our customers it take multiple quarters to get through the process validation and Mint and then move from their current particular part D. R.
Mac Ito: Good morning. I appreciate you taking the questions. May you just following up on Larry, I appreciate the commentary there but I just want to kind of understand the the additional customers that you've added they take time to ramp and get get to their, you know, full run rate.
Mac Ito: As it were. But if we were to look at over 2025 and then and
Speaker Change: Buying from US will support the current drug in the market as they transition to a high level higher level product. It does take time.
Speaker Change: 6. Uh, I think you've added roughly 100 and you expected half of those to contribute to 2025, should that be proportional as we look towards 2026 growth. So,
Speaker Change: you know, customers in 2025 ramping but also the additions of the re the recent additions as well.
Speaker Change: There are examples where it can be only two quarters theres. Some examples where they are four plus quarters. So as we think about the timing and the pacing we've been the regulations were put in place.
Speaker Change: Yeah. It's it's speaks well to kind of the future pipeline but uh and many of these, Annex 1 projects, we work with our customers. They take multiple quarters to get through the process.
Speaker Change: At the end of 2023 sort of.
Speaker Change: Seen a ramp up in 'twenty, four and we continue to see that ramp up throughout 2025, but it is a long process and we believe this is a multiyear so it's not a customer it's multiple customers.
Speaker Change: With the number of projects we're working on.
Speaker Change: Thank you. Our next question comes from Daniel Markowitz with Evercore ISI. Your line is open.
Daniel Markowitz: Hey, al. Thank you for taking my question congrats on a good quarter.
Daniel Markowitz: A two parter on <unk>. The first is it is good to see the continued strong sequential project growth I was curious if you could tell us the contribution in the quarter I think it was 200 basis points in the first quarter. So would love the comparable for the second and then the second part it seems like there were about 200 projects just nine months ago and now we're almost done.
Speaker Change: Validation and, um, and then move from the current particular product, they are buying from us, they'll support their current drug in the market as they transition to a high level higher level product. It does take time there, there are examples where it could be, only 2 quarters, there's some examples where there are 4 plus quarters. So as we think about the timing and the pacing we've been, uh, the regulations were put in place and middle to the end of 2023. We started seeing a ramp up in 24 and we continue to see that ramp up throughout 2025. But it is a long, uh, process and we believe this is multi-year. Uh, so it's not 8 customers, multiple customers. Um, uh, with with the number of projects we're working on.
Daniel Markowitz: Will that it's been a steep ramp all around in the number of projects I was wondering if it's fair to use the number of projects as a proxy for the revenue contribution if we take into account the 12 months to 18 months project time.
Speaker Change: Thank you. Our next question comes from Daniel meirowitz with evercore, isi. Your line is open.
Daniel Markowitz: Through commercialization. Thank you.
Daniel Markowitz: Yes, Daniel when you look at it.
Daniel Markowitz: As mentioned earlier, we will look at the <unk> contribution this year over the full year. There is a little bit of timing from a revenue recognition perspective. So we do feel really comfortable with the 150 basis points in 2025.
Daniel Markowitz: Obviously, we will.
Daniel Markowitz: Keep pace with our customers' demand and accelerate that if we need to but because it is a multi quarter event.
Daniel Markowitz: It does take a long this is multiyear.
Daniel Meirowitz: Hey y'all. Thank you for taking my question. Congrats on a good quarter. Uh, I had a 2-part on Annex 1. The first, is it? It's good to see the continued strong sequential project growth. I was curious. If you could tell us the contribution in the quarter, I think it was 200 basis points in the first quarter, so would love the comparable for the second. And then the second part, it seems like there were about 200 projects just 9 months ago and now we're almost double that it's been a steep ramp all around and the number of projects, I was wondering if it's fair to use the number of projects as a proxy for the revenue contribution. If we take into account the 12th to 18th month project time uh through commercialization, thank you.
Daniel Markowitz: Upgrades you will see.
Daniel Markowitz: For west for our customers.
Daniel Markowitz: It's really it's hard to really articulate is going to be all in 2025 or 2026. This will be a multiyear process.
Daniel Markowitz: And we will update you as we get ready towards the end of the year, how it's going to translate into 2020, but it has positive momentum candidly on the number of projects that we're getting the interest level and when we first started talking about Nx one one of the decision.
Speaker Change: Yeah, Daniel, when you look at, um, as mentioned earlier, we look at the annex 1 contribution this year over the full year. There's a little bit of timing from a revenue recognition perspective. So we do feel really comfortable with the 150 basis points in 2025. Uh, obviously we will, uh, keep Pace with our customers demand and, and, and accelerate that if we need to, but because it is a multiorder event and is it does take a long, this is multi-year, um,
Daniel Markowitz: Criteria for our customers the determine do they bring the investment capital internally or do they have west handle these processes and what we're finding is that.
Daniel Markowitz: Our proven network strategy the scale the quality the capabilities. We have in house is capturing a significant portion of those opportunities, but right now were still stating we're 150 basis points. This year, we will give further color when we get close to <unk>.
Daniel Markowitz: Next year.
Speaker Change: Thank you. Our next question comes from Doug Schenkel with Wolfe Research. Your line is open.
Speaker Change: Good morning, and thank you for taking my questions. So one model cleanup question, which I'll come back to in a second and then one longer term question, which I want to start with now so as I'm sure. You. Appreciate a key area of focus for the investment community is really getting a handle on where west is in returning to normalized.
Speaker Change: Uh my upgrades you will see um 4 West for our customers. You know it's really hard to really articulate. It's going to be all in 2025 or 2026. This will be a multi-year process. Uh, and we'll update you as we get ready, uh, towards the end of the year, how it's going to translate into 2026, but it is possible momentum. Candidly on the number of projects that we're getting the interest level. And when we first started talking about, Annex 1, 1 of the decision, um, criteria for our, our customers is to determine, do they bring do they invest in the capital internally or do they have West handle these processes? And what we're finding is that, um, our our proven Network strategy, the scale, the quality, the capabilities we have in house,
Speaker Change: Is this capturing a significant portion of those opportunities but right now, we're, we're still stating. We're 150 basis points this year. Uh, we'll give further color when when we get, you know, close to next year.
Speaker Change: Growth.
Speaker Change: First half organic revenue growth was around four 5%, excluding catch up payments, you're guiding us to expect 5% to 6% organic revenue growth in the second half.
Speaker Change: Dog shinkle with.
Speaker Change: Wolfe research. Your line is open.
Speaker Change: Acknowledging you're not going to give us 2026 guidance today I'm just wondering as currently built and with no material changes in policy dynamics are there any things you would want us to contemplate as we update our out year model.
Speaker Change: Because if not it would seem to be logical to just continue to.
Speaker Change: Good morning, and thank you for taking my questions. So, um, 1 model cleanup question which I'll come back to in a second and then 1 longer term question, which I want to start with now. So as I'm sure you appreciate a key area of focus. For the investment Community is, is really getting a handle on where West is in returning to normalized growth.
Speaker Change: To model you on kind of a straight line of slow, but steady improvement the way that we're seeing things play out this year. So that's the first question the <unk>.
Speaker Change: First half organic Revenue growth was around 4 and a half percent, excluding catch-up payments. Your guiding us to expect 5 to 6%. Organic Revenue growth in the second half.
Speaker Change: Second is I just want to clarify what is embedded into guidance for tariffs is at current rates is that where rates were a month ago.
Speaker Change: Acknowledging. You're not going to give us 2026 guidance. Uh, today I'm just wondering as currently built and with no material changes in policy Dynamics.
Speaker Change: Some companies in earnings season, thus far have embedded assumptions for worse than currently.
Speaker Change: Outlined tariff policies. So I just wanted to see what exactly is in guidance and is there any potential for upside to your targets.
Speaker Change: If the current proposals remain as currently proposed thank you.
Speaker Change: Berger.
Speaker Change: Ill start off.
Speaker Change: Answering your question on the tariffs so really it's based on what we knew when we were putting the guidance together now there was a change yesterday around Japan.
Speaker Change: That is fully contemplated in our guidance, but we don't think thats overly material.
Speaker Change: So it was based on what we knew that had kind of rolled out over the last couple of months.
Speaker Change: Are there any things you would want us to contemplate as we update our about your model? Um, because if not it it would seem to be logical to just continue to to to to, to model you on, kind of a straight line of, you know, slow, but steady Improvement the way that we're seeing things play out this year. So that's the first question. The second is I just want to clarify. Um, what is embedded into guidance for tariffs is? Is it current rates? Is it, you know where rates were a month ago? Um, you know, some companies in earning season thus far have embedded assumptions for worse than currently, um, outlined tariff policies. So I just want to see what exactly is in guidance and is there any potential for upside to your targets?
Speaker Change: And so we are going to continue to monitor that situation and we will update based on any changes that occur.
Speaker Change: If the current proposals remain as um currently proposed, thank you.
Speaker Change: The material materiality perspective, we're also working on a number of mitigation efforts.
Speaker Change: Within our supply chain itself and also with our customers and we continue to do that.
Speaker Change: Based on what we understand today that is embedded into our guidance.
Speaker Change: Given the way this scenario is playing out and how it's changing over the next how it has been changing and we will continue to change we'll contemplate that in guidance when we move into Q3.
Speaker Change: Yeah, I'll I'll start it uh answering your question on the Tariff. So really it's based on, you know what we knew when we were putting the guidance together. Now there was a change yesterday around Japan that isn't fully contemplated in our guide, but we don't think that's overly material. Um, so it was based on what we knew that had kind of rolled out over the last couple of months.
Speaker Change: I'll answer the first part of the question if you don't mind.
Speaker Change: It's in regards to the the growth of less than.
Speaker Change: Feeling really good about the momentum we're seeing with HCP components.
Speaker Change: We mentioned the last couple of calls where we believe will be build momentum throughout the year.
Speaker Change: embedded into our guidance, but
Speaker Change: I think we may have used the word transition.
Speaker Change: For 2025, and 2026 I won't comment specifically about 2026, but this.
Speaker Change: <unk>.
Speaker Change: I gave the numbers a little bit earlier, we're thinking about when you look at the second half based on current.
Speaker Change: Order trends customer demands are.
Speaker Change: Our manufacturing capabilities.
Speaker Change: Our building up for the second half.
Speaker Change: I am really very positive about how the team in Europe is handling the.
Speaker Change: Accelerated demand acceleration to bill to add a number of team members and our locations built to address the capacity.
Speaker Change: Given the way this scenario is playing out and how it's changing over the next, you know, how it has been changing, and we'll continue to change. You know, we'll contemplate that in guidance, when we move into Q3. Yeah, it all adds to the the first part of the question, if you don't mind, it's it's in regards to the the growth of of, of West and, you know, I'm feeling really good about the momentum. We're seeing with HPP components. You know, we we mentioned um, the last couple calls were we believe will be build momentum throughout the year. Um, I think we might have used the word transition, uh, year 2025 into 2026, I won't comment specifically about 2026 but this momentum is
Speaker Change: Which is we believe we can correct and get the growth that we anticipate the bills for our customers for the balance of this year going forward, but there is there is.
Speaker Change: um, you know, I I gave numbers a little bit earlier where thinking about, you know, when you look at the second half based on current order, Trends customer demands
Speaker Change: Are manufacturing capabilities. Um, are building up for the second half.
Speaker Change: Momentum I would say from the back you think about last year last year early part of this year.
Q1, and now we're building off of that.
Speaker Change: Like I said too early to call on 2026 foot overall very encouraged.
Speaker Change: Thank you. Our next question comes from Luke <unk> with Barclays. Your line is open.
Speaker Change: And as you say on <unk> for Luke Thanks for taking our questions.
Speaker Change: Just one on the auto injector capacity you guys have now what's the current revenue capacity of the Dublin facility for auto injectors, and pens and whats the expected opex leverage overtime of filling that capacity.
Speaker Change: I'm really very positive about how the team in Europe is handling. The, um, accelerate, you know, the demand acceleration to be able to add a number of team members in our locations, build to address the capacity, uh, which is which we believe we can correct. And, and, and get the growth that we anticipate the bills for our customers for the balance this year, going forward. But there is there is, um, momentum I would say from the back.
Speaker Change: Back. You think about last last year? Early part of this year, specifically q1. And now we're building off of that.
Speaker Change: And just given the additional capacity that's coming on from the former CGM manufacturing what's your visibility on is doing what you currently have built.
Speaker Change: Uh, like I said too early to call on 2026 but overall very encouraged.
Luke Sergot: Thank you. Our next question, comes from, Luke sergot with Barclays. Your line is open.
Speaker Change: Yes.
Speaker Change: This cycle first of all on the ramp up of our facility here in Dublin.
Speaker Change: I'm very proud of the team and how they have positioned that we do have some.
Speaker Change: Some commercial manufacturing of auto injectors currently going through the facility, but it's only a portion of multiple.
Luke Sergot: This is Salem Salem on for Luke. Uh, thanks for taking our questions, uh, just 1 on the auto injector capacity. You guys have now, uh, what's the current Revenue capacity of the Dublin facility for auto injectors and pens? And what's the expected Opex? Leverage over time of filling that capacity,
Speaker Change: Installations are happening throughout 2025, we will see more ramp up towards the end of this year again for auto injectors and <unk>.
Luke Sergot: And uh you know, just given the additional capacity that's coming on from the former CGM. Manufacturing, what's your visibility on filling? You know what you you currently have built. Thanks.
Speaker Change: In our typical going from initial.
Speaker Change: Sorry to manufacturing to more peak volumes does take call. It nine two.
Speaker Change: 12, 12 months to get to fully optimize.
Speaker Change: In addition here in Dublin, the facility that we have <unk>.
Speaker Change: Invested in with our customer does handle does due to the drug handling.
Speaker Change: Now that is going through a process right now equipment's installed, but we're looking at early 2026 to start commercialization similar comment made earlier there is a ramp up phase.
Speaker Change: Yeah, look yeah, let's talk. First of all on the ramp up of our facility here in Dublin. Uh, I'm very proud of the team and how they have positioned it. We do have uh, some commercial manufacturing of Auto injectors currently going through the facility, but it's only a portion of multiple, um, installations that are happening throughout 2025. We'll see more ramped up towards the end of this year, again for auto injectors and pens. And, and, and our typical going
Speaker Change: So I'm not going to get into the specific revenues of that site.
Speaker Change: Our profit, but I would say it is a we believe it's a good growth driver as we get into 2006 to offset.
Initial start of manufacturing to more Peak volumes does, take call at 9 to, um, you know, 12, 12 months, to get to, you know, fully optimized.
Speaker Change: The CGM diagnostics device that we will stop manufacturing.
Speaker Change: In addition here in Dublin, the facility that we have, um, invested in with our customer does handle drug. Does do the drug handling
Speaker Change: End of June of 2026.
Speaker Change: In regards to identifying new opportunities for.
Speaker Change: The CGM.
Speaker Change: And we're excited with the current clients that were speaking with looking at their projects.
Speaker Change: This site that would become available in 2026 is highly regarded.
Speaker Change: Based on the engineering quality and the capability of the team has built over time.
Speaker Change: So we're very confident we'll be in a very good position to make the transition once that that.
Speaker Change: The automation for that particular product is moved out of our facility, we transitioned to a new product for different customers. So.
Speaker Change: Now that is going through process right now, equipments installed, but we're looking at early 2020 26 to start commercialization similar to comment made earlier, there is a ramp up phase um so I'm not going to get into the specific revenues of that site, um, or or profits. But I would say it is a, uh, we believe it's a good growth driver as we get into 2026 to offset. Uh, the CGM Diagnostics device that we will stop manufacturing, uh, end of June of 2026. Uh, in regards to identifying new opportunities for uh, the CGM.
Speaker Change: Very positive where we are more work needs to be done.
Speaker Change: But we're in a good position.
Speaker Change: Thank you.
Speaker Change: Next question comes from Tom <unk> with Nephron Research your line is open.
Tom: Hey, guys. Thanks for taking the question.
Speaker Change: And we're excited with the current clients that we're speaking with looking at their projects and this site that, uh, would become available in 2026 is highly regarded, uh, based on the engineering quality and the capabilities of the team has built over time. Um, so we're very confident, we'll, we'll be in a very good position to make the transition once that that, um,
Speaker Change: I know you spent several years focusing god.
Tom: Did seeds of supply around high.
Tom: High value product components.
Tom: Just curious.
Tom: But maybe not give a.
Speaker Change: The, the automation for that particular product is moved out of our facility and we transition to a, to a new product for, for a different customers. So very positive, uh, where we are.
Speaker Change: Percentage, but are most of the products in the portfolio validated across.
Speaker Change: More work needs to be done. Uh, but we're in a good position.
Speaker Change: Either multiple facilities and multiple geographies and have you also seed customer.
Speaker Change: Thank you.
Speaker Change: Demand I guess for adding additional location validation given maybe the desire to mitigate tariffs.
Speaker Change: Yes, Tom you're right. When you look at our how were co located to our customers actually were very well positioned today.
Speaker Change: Hey guys. Uh, thanks for taking the question. Um, I know you spent several years focusing on, uh, redundancies of supply around, um, high value product components. Um, and it was just curious, um,
Speaker Change: As we have two high value product clients in the United States two in Europe, and one in Asia in Singapore.
Speaker Change: You know, maybe not may not give a percentage but um, are most of the products in the portfolio validated across.
Speaker Change: So when you look at it from a tariff perspective.
Speaker Change: either multiple facilities and or multiple geographies and have you also see customer
Speaker Change: We are introducing a lot of cost.
Speaker Change: For the size of the manufacturing we do.
Speaker Change: Uh, debate, I guess for adding additional location, uh, validation given uh, maybe the desire to mitigate tariffs.
Speaker Change: If I if you think about our Waterford plant for example in Maryland majority of the product finished product goes to our customers. While they are global customers. They tend to end up in the European region.
Speaker Change: That's pretty much the case in many many of our HPV plants. However, there are a few occasions, where a client may have a.
Speaker Change: A particular product they want it transferred to that May have only one site validated.
Speaker Change: Yeah, Tom, you're right. When you look at our how we're collocated to our customers actually, we're very well positioned today. Um a lot as we have 2, high value product plans in the United States 2 in Europe and and 1 in Asia and Singapore. Um, so when you look at our, from a tariff perspective, uh we we aren't introducing a lot of cost, um, for the size of the manufacturing, we do.
Speaker Change: So there's two elements that one is we want to have multiple sites. So we can level order operations or effectively but secondly is make sure that we're producing in region for region of consumption. So there is some work to be done.
Speaker Change: If I, if you think about our Waterford plant, for example, in Ireland, majority of the product, finished product goes to our customers, while they're Global customers, they tend to end up in the European region.
Speaker Change: Prefer not to give a percentage, but I'd say, we're very well positioned and you can see that in the net tariff or the gross tariff costs that we have as a headwind.
Speaker Change: Thank you. Our next question comes from Patrick Donnelly with Citi. Your line is open.
Speaker Change: And and that's that's pretty much the case in many. Uh, many of our HPP plans. However, there are a few occasions where a a client may have a um uh, a particular product. They want to transfer to that may have only 1 sight validated
Patrick Donnelly: Hey, guys. Thanks for taking the questions.
Patrick Donnelly: Maybe one on the margin side really nice performance this quarter.
Patrick Donnelly: High value seems to be doing a little bit better moving higher as the year goes can you just talk about the margin construct as we work our way through the second half and again just high level those building blocks as we move forward obviously the cgmp's.
Patrick Donnelly: Probably a bit of a headwind next year.
Speaker Change: So there's 2 elements that 1 is, we want to have multiple sites so we can level older operations, more effectively, but secondly is make sure that we're producing in region for the region of consumption. So there's some work to be done. I'm not I don't uh prefer not to give a percentage but I'd say, we're very well positioned. And you you kind of see that in the net tariff or the gross, tariff costs that we have as a headwind.
Patrick Donnelly: Think about the right margin build as we work away at year end.
Patrick Donnelly: As we go forward into 2006, just given the high value momentum cgmp.
Patrick Donnelly: Thank you. Our next question comes from Patrick Donnelly with City. Your line is open.
Patrick Donnelly: It would be helpful. Just talk through how we think about the margin for the second half and again. The go forward. Thank you guys.
Patrick Donnelly: Yes, if we look at the margin in the second half.
Patrick Donnelly: There there will be a little bit of them.
Patrick Donnelly: Step down from Q2 as you move into Q3, and that's typically what we see from a seasonality perspective based on plant shutdowns that we have primarily within Europe.
Patrick Donnelly: And also what we're seeing is that because of that there is.
Patrick Donnelly: A less absorption based on the volumes that are being moved through the facilities.
Patrick Donnelly: Hey guys, thanks for taking the questions. Um, maybe 1 on the margin side, you know, really nice performance, this quarter, you know, high value. Seems to be doing a little bit better, moving, higher as the year goes. Can you just talk about the margin construct as we work our way through the second half and again, just high level, those building blocks as we move forward, obviously the CGM piece, uh, you know, probably a bit of a headwind this year. You're just trying to think about the right margin build, as we work our way year end, you know, into into go forward into 26, just give him, you know, the high value momentum, the CGM piece. Um, again, it would be helpful to just talk through how we think about the margins, the second half. And again, the go forward. Thank you guys.
Patrick Donnelly: We built inventory as we've gone through Q2 to be able to serve the market into Q3 and take account of those plant shutdowns. So you do see a little bit of impact on margin there.
Patrick Donnelly: yeah, yeah, if if we look at the margin in the second half, um, there there will be a little bit of, um, you know,
Patrick Donnelly: That is what we would have typically seen from a seasonality perspective in the past.
Patrick Donnelly: And also what we're doing in area kind of alluded to is to meet the demand that we're seeing in some of our plants were onboarding.
Patrick Donnelly: step down from Q2 As you move into Q3. And that's typically what we see from the seasonality perspective, based on plant shutdowns that we have primarily within Europe. Um, and also what we're seeing is that, you know, because of that there's
Patrick Donnelly: And a large enough head count an increase in that facility.
Patrick Donnelly: A less absorption based on the volume that are being moved through the facilities.
Patrick Donnelly: Um,
Patrick Donnelly: That requires a level of training there is potentially some impact on productivity there that we were.
Patrick Donnelly: We're looking to mitigate but that is something that we have to consider when.
Patrick Donnelly: When we put the guide together, so I think youre going to see.
Patrick Donnelly: A little bit of that.
Patrick Donnelly: We we've built inventory, as we've gone through Q2, to be able to serve the market into Q3 and take account of those plant shutdowns. So you do see a little bit of impact on margin there, but that's what we would have typically seen from a seasonality perspective, in, in the past.
Patrick Donnelly: Slightly lower margins as you go through the second half of the year, but versus Q2, but again thats, what we would typically see normal circumstances, when you've taken the seasonality and the number of working days in each quarter.
Patrick Donnelly: Thank you. Our next question comes from Matt <unk> with William Blair. Your line is open.
Matt: Alright, good morning, when you took down.
Patrick Donnelly: Um, and also what we're doing in area, kind of alluded to is to meet the demand that we're seeing in some of our plants where on boarding a, a large enough head count. Um, increase in that facility, that requires a level of training. There is potentially some impact on productivity there that we, you know, we're looking to mitigate but that, that is something that we have to consider when we put the guy together. So I think you're going to see a little bit of, um,
Matt: Alright guide last quarter around EQT to mid to high single digits.
Matt: The issue highlighted what's a customer making sort of a change order for led.
Matt: To a constraint that facility and obviously you've been working too.
Patrick Donnelly: Slightly lower margins as you go through the second half of the year, but versus Q2. But again, that's what we would typically see normal circumstances. When you bake into seasonality, and the number of working days in each quarter,
Matt: Amp up labor to address that.
Matt: You raised the guide back to mid to high single digits, but it sounds like those labor constraints are still in place. So maybe wanted to get a sense for timing to resolution there and then.
Speaker Change: Thank you. Our next question comes from Matt LaRue with William. Blair, your line is open.
Matt: Given that Easter is later.
Speaker Change: All right, good morning. Uh, when you took down the, um,
Matt: Sort of a path to potential upside in terms of a return to normalization. If you can if you can get the labor issues solve.
Matt: This year.
Matt: Yes, Matt you're right.
Matt: Had an opportunity to be at that facility with the team to walk through the plans that they put in place and I know they are executing.
Matt: Well against those plans it is a ramp up we expect to ramp up is happening as we speak.
Matt: As you know it does take several weeks to get a new team member.
Matt: <unk>.
Matt: To support us in the plant effectively around quality and safety.
Matt: So there is an opportunity to continue to accelerate that process.
Speaker Change: You raised the guy back to Mid die single digits, but it sounds like those labor constraints are, are still in place, so maybe we wanted to get a sense for, you know, timing to resolution there. And and then, you know, given that it still exists is that a, you know, sort of a past and potential upside in terms of return to normalization, if you can, if you can get the labor issues, uh, uh, solved this year,
Matt: But as we commented the growth is coming from multiple angles on their HCP.
Matt: Components.
Matt: Talk about the biologics will be stronger in the second half.
Matt: We're seeing continued growth in <unk> and also on <unk>, one and then the.
Matt: Titan Europe.
Matt: As one of the sites that we are continuously adding more labor to alleviate some of those constraints. It's positive it's net positive.
Matt: But we'll update you as we go throughout the throughout.
Matt: Throughout the quarter for the next call, but more importantly, as we want to make sure that we as we've raised that to mid to high single digit is that confidence we will be able to deliver that range for HCP components based on what we know right now.
Speaker Change: Thank you. Our next question comes from Tucker Remmers with Jefferies. Your line is open.
Speaker Change: Yeah. Matt you're right. And I had an opportunity to be at the facility with the team to walk through the plans, they put in place and I know they're executing, uh, very well against those plans. It is a ramp up. We expect the ramp up is, is happening as we speak. Um, as you know, it does take several weeks to get a new team member up the up, the speed will, uh, be able to support us in the plants effectively around quality and safety. Um, so there there is an opportunity to continue to accelerate that process. Um but as as we commented the the growth is coming from multiple angles on our HPP uh components. That's we talk about the biologics, we'll be stronger than the second half. Uh, we're seeing continued growth in glp ones and also in Annex 1. And then the S the uh site in Europe. Um is is 1 of the sites that we are continuously adding more labored.
Tucker Remmers: Hello, Thanks for taking my question and good job on the quarter.
Speaker Change: To alleviate some of those constraints. So it's positive, it's not positive. Um,
Speaker Change: My question really revolves around.
Speaker Change: Smart doesn't advisors.
Speaker Change: Knowing that what you've got and Matt you talked about.
Speaker Change: How difficult our upstate more complicated that devices to assemble an and.
Speaker Change: Youre automate that process, probably sometime in 2026 on that new line comes on but.
Speaker Change: But we'll we'll update you as we go throughout the uh throughout the quarter for the next call but more importantly is we want to make sure that we as we raise it. Uh to mid to high single digits, it's like confidence. We will be able to deliver that range for HPP components based on what we know right now.
Speaker Change: What are the hurdles to automating that.
Speaker Change: Smart device.
Speaker Change: And kind of.
Speaker Change: Difficulties in being that validated and is there any sort of indication guidance you can give on the margin improvement that you can see on smart dose when that new lines installed. Thank you.
Speaker Change: Thank you. Our next question comes from Tucker rammer with Jeffrey's. Your line is open.
Speaker Change: Yes. Thank you for the question.
Speaker Change: Constantly tell that we're on track we're executing two elements simultaneously. The first one we are driving.
Speaker Change: Meaningful cost improvements.
Speaker Change: Very focused on that.
Speaker Change: And that also includes the.
Speaker Change: <unk>.
Speaker Change: Validation and commercialization of the automated line.
Speaker Change: We're looking at that late 2025 in early 2026, and we're on schedule.
Speaker Change: Hello. Uh, thanks for taking my question and good job on the quarter. Um, my question really revolves around the smart dose device and so coming up with you guys in May, I think you talked about um, how difficult or how to say more complicated that devices to assemble. And I know you're automating that process probably sometime in 2026 on a new line comes on but there's 1 of the hurdles to automating that um smart just device um and kind of difficulties with getting that validated. And is there any sort of indication uh guidance you can give on the margin Improvement that you can see on Smart dose when the new lines installed? Thank you.
Speaker Change: The initial.
Speaker Change: Peter is very supportive.
Speaker Change: And then we'll continue to evaluate all strategic options as we go forward.
Speaker Change: But we don't comment specifically about margin on a product within the portfolio.
Speaker Change: But I can assure you that we are focused on both of those leavers that as we speak.
Speaker Change: Yeah, thank you for the question. I can I can confidently tell you that. We're on track. We're executing 2 elements. Uh, simultaneously. The first 1 we're driving. You think about meaningful costs improvements and other teams very focused on that. Um, and that also includes the the uh validation and commercialization of the automated line.
Speaker Change: Thank you again to ask a question. Please press star one one.
Speaker Change: Our next question is a follow up from Larry Solow with CJS Securities. Your line is open.
Speaker Change: Great. Thanks, just a quickie on the SG&A in the quarter.
Speaker Change: We're looking at that, at least 2025 and early 2026, and, and we're on schedule. Um, the initial uh, data is very supportive and then we'll continue evaluate all strategic options, uh, as we go forward.
Speaker Change: So I'll share it looks like it was up like 16% I know that moves around a little bit quarter to quarter was or anything.
Speaker Change: Particular in this quarter that drove up thanks.
Speaker Change: No nothing specific carrier callout on that Larry again currency has an impact on us because the euro dollar rate moved pretty considerably in the quarter.
Speaker Change: Um, but we don't comment specifically about margin on on a product within the portfolio, um, but I can assure you that we are focused on both of those levers that as we speak.
Speaker Change: Thank you again to ask a question. Please press star 1, 1 1.
Speaker Change: Thank you. This concludes the question and answer session I would now like to turn it back to John Sweeney head of Investor Relations for closing remarks.
Larry Solo: Our next question is a follow up from Larry solo with CJs security. So your line is open.
John Sweeney: Thank you very much for joining us today on the call and online archive is available on our website at West pharma Dot com in our Investor Relations section. Additionally, you can access a replay for 30 days by using the dial in numbers and conference I'd provided at the end of today's earnings release that concludes the call.
Larry Solo: Uh, great thanks. Just a quickie on SJ and I in the quarter. Uh, I think until I asked you, and it looks like it was up, like 16%. I know that moves around a little bit quarter to quarter, was there anything, um, particular in this quarter that drove that box.
Speaker Change: No, no nothing specific carrier or call out on that. Larry again, currency has an impact on it because the euro dollar rate moved pretty considerably in the quarter.
Speaker Change: Thank you have a great day.
Speaker Change: This concludes today's conference call.
Speaker Change: Thank you. This concludes the question and answer session.
Speaker Change: You for participating you may now disconnect.
Speaker Change: I would now like to turn it back to John Sweeney out of investor relations for closing remarks.
John Sweeney: Thank you very much for joining us today. On the call an online archive is available in our website at Westfarms in our investor relations section. Additionally, you can access the Replay for 30 days by using the dial-in numbers and Conference ID. Provided at the end of today's earnings release that concludes the call. Thank you have a great day.
Speaker Change: This concludes today's conference call.
John Sweeney: Thank you for participating. You may now. Disconnect