Silgan (SLGN) 26 Oct 222022 Q3 Earnings call transcript

Thank you for joining the Silgan Holdings Third Quarter 2022 Earnings Results Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Kim Ulmer, Senior Vice President, Finance and Treasurer of Silgan Holdings. Please go ahead.

Thank you.

company Bob have Lewis, the and Greenlee, from and CEO; EVP me today, Adam I President Joining and CFO.

limited in but the and and statements. that events on company, a filings today turn I'll upon management's begin the not described company make Form materially those impacting XX-K These forward-looking may or to with the we call and over risks, made would Therefore, statements. of could we it number Before report those based company's annual are the like be from operations expressed to, it forward-looking the clear SEC. condition with of involve for this beliefs certain other and on actual Adam. made forward-looking or And expectations including, therefore, statements statements uncertainties that, conference call today, of differ the financial implied to concerning XXXX results the in future

we'd and give everyone our expectations. thoughts Kim, make financial the about share will quarter, you, earnings to the a the our few to remainder I'll growth XXXX provide the quarter a and at our happy year regarding around of call. then review XXXX any preliminary more details and we'd questions. XXXX performance, outlook, then Thank be third comments Bob Silgan's answer like welcome look to

to a mechanisms. excellence of perform and at reducing delivering efficient Silgan and As release, disciplined high operational maintaining drive continues our operating in value a to related shareholders cost meeting for businesses at utilization the record and very costs, reliability of our excellence, needs pass-through customers. for through our assets to targeting our financial saw are you approach this very finally, The customers, press on and morning's level team unique and aimed continue commercial our focused consistently our performance

earnings per record earnings prior record of result, for $X.XX year's XXXX. diluted significant delivered the for quarter. an quarter, a an share year-to-date third the adjusted second the importantly, Silgan consecutive over and our quarter, from increase of versus And a As all-time increase XX% over XX%

destocking in prior quarter, volumes, for and anticipated XX% quarter strong, Closures third normalization Metal with select levels absolute volumes levels our levels. year the and Dispensing categories impacts and below volumes the products organic pre-pandemic demand drove XX% While remained in Container above pre-pandemic third above Specialty

in segments importantly, More improvement each meaningful the business in operating we delivered our quarter. year-over-year income of

will the full of record $X.XX $X.XX the a include and $XXX year XX.X% be year record share, sixth expectations earnings tightening record a the of cash increase per our to and do year higher performance. performance versus represents also consecutive U.S. $X.XX million We're and This our which to strengthening of approximately free XXXX. earnings flow fourth XXXX estimate range the which at $X rates, to-date per Given we interest dollar for share quarter, guidance midpoint our a our of compares are per for to confirming share. of adjusted the of range to range the for of prior the company's prior

continue to mission Finally, at each acknowledgment we for and our of prospects to our at an the in In XXXX, ongoing future our our core as we the of remain of early serve confident a take markets will our ability businesses continued look Silgan, deliver of the believe products organization our execute of we teams of dynamic to broad compete and power as win and always, the economic in through well. the portfolio company value variety And circumstances. position we growth.

organic our a of expect operating benefit to in we to business result, volume segments and deliver earnings a be we XXXX. will growth improvements, As each anticipate which

as well. financial I around results and XXXX significantly expect additional earnings do over will Bob conversion review turn our it now higher detail cash With for we XXXX. provide more to estimates the of addition, that, In in balance free explanation in to flow the

Good Adam. everyone. you, Thank morning,

third Dispensing Containers we were results, and levels. As volumes, and delivered and quarter above expected Metal in Closures particularly record Specialty year-to-date largely well and Adam highlighted, pre-pandemic as

Metal Our was costs cost recovering performance and good Specialty Closures very in Dispensing reductions. operating strong pricing our a job and of and businesses each of and inflationary Containers, did through

offset impact inflationary net prices partially of the for manufacturing for income third the to resin XXXX of sales Container As to of approximately net announced primarily from in costs Dispensing for of sales inventory each and of demand to inflation the quarter. currency segment of were better adjusted Highlights pass volumes Strong and favorable purchase $X and costs. mix resulting in raw a offset favorable and in segment partially material operating more segment pass from businesses. through lagged an prices of the unfavorable SG&A income as the quarter This certain quarter of a offset each This performance, follows: sold manufacturing million, million was through labor strong Metal $XXX,XXX in for increased of as selling in of pass increase third or per diluted $X.X pass the for quarter increased foreign unfavorable consolidated primarily of $X.X charges, benefits changes, third average acquisition by income partially for a XX.X% acquisitions. and $XX.X $X.X rationalization accounting and products million costs, volumes, contributed offset the $XXX.X Custom and products segment write-up the costs operating million from inflation million. rationalization Dispensing allowing Supply lower approximately average segment of a the These costs higher higher performance, The earnings primarily to million. translation million performance, and or pass income levels in compared partially increase result lower result of $X.X cost impact Metal On taxes currency we The the of adjustments more us of volumes income. adjusted segment delivered the Custom Closures, lower inflationary and inflationary as $X.XX. third and $XX.X for through XXXX Adjusted of primarily manage of higher favorable currency $X.XXX and Custom for unit of customer of these volumes by XX.X% million, the of impact costs, of the costs, in selling including through prices the continued and resin share The SG&A increase average Closure for million for during in year-over-year year. The result, billion, adjusted million of by due foreign for charges million manufacturing increase is and $XX.X in unfavorable was for of of and a our XXXX, our the as million recent as of attributable in translation impact were translation foreign the higher segments acquisitions. through costs attributable $XXX.X This costs, a increase $XXX.X million. of the Containers with $XX.X lower result due pass and or primarily the $X.X through to Specialty resin versus changes manufacturing of and Specialty lagged the to Containers operating and of was chain million. impact million. costs Containers was inflationary volumes. basis, partially increase of through selling Metal inventory. by segment the the inflation to SG&A as interest unfavorable XXXX. higher and in attributable delayed We Containers the challenges to to adjusted and lower increased recovery. $X.X quarter of by converted of foreign quarter into SG&A of strong was inflationary other million adjustments acquisitions adjusted $XX in Adjusted approximately delivered cost in mix income XXXX Metal sales segment an to after $X.X $XXX.X XX.X% favorable $X.X the after offset million million currency costs before of pass inflation quarter prior and sold well

range on Turning $X. per midpoint from an providing now The range to XXXX record tightened This year-to-date this remainder year-over-year. and a based our our performance, outlined We're of our the of in income our impact our current outlook outlook volume XXXX adjusted of estimate for for press XX.X% B represents net diluted in share release. performance. the operating estimate Table expected excludes of certain increase $X.XX adjustments of to the

in tax $XXX compared include in we volume and the adjusted full estimate of share Container The is Dispensing is prior XXXX prior segments the to of income net range fourth and million earnings respectively. quarter and of earnings also providing the assumptions million $XXX XXXX Our of $X.XX updated XX% year a the quarter expense approximately in rate interest estimate to fourth year range XXXX We're in that Specialty the lap Metal pre-buy year. share year quarter per comparison and of to the a adjusted as XX%, year-over-year diluted faces our of and difficult $X.XX fourth impact as per in $X.XX the period. diluted XXXX Closure full

of teams our In rationalize quarter-over-quarter the a business, to fourth in from profit on fourth continue and quarter retail into continuing better basis. the the expect performance. improvement cost channel to Custom to operating be we efforts lower expect and segments the continued as lower drive business, return quarter on both our earnings basis volumes However, we quarter-over-quarter segment Containers and our timing with destocking a in

flow million as million headwind our we over open That material prepared approximately comments, from $XXX I'll working a and we it CapEx to year, estimate a it and for the of for raw addition, session. and of up free cash instructions capital result Q&A, so In includes confirming to turn other approximately $XXX which of are Q&A for significant the can concludes provide inflation. of Emma our year-over-year

Wilde Your comes Mark from first Montreal. you. Thank [Operator Instructions] of today Bank from question

now Your open. line is

morning, Good Good Bob. Adam. morning, Thanks.

Hi, Mark.

start which as that, was And if other that the weaker talk stronger little you I to a came food, actually you bit whole. out numbers than than pet a industry waiting the category given there? to curious food They a Just were I Any the of bit off, could wondered out would about call day. the can volumes. was issues kind you're about particularly

Mark. Yeah,

'XX. think we I more in it's that how about talked again, our volumes and influences about, what in XXXX

canned for So particular, as customers products our as they we products ground had to supply related to opportunity go the back you vegetable the category, volume if vegetable in really not we were -- the restock year 'XX. first the only increased supporting chain significant and into a when in went ago, were having

We industry. also significant cans a of the sold amount of the balance to

would quarter pre-pandemic. footprint So across that XX% we improvement And third had of of bit metal overlay in benefit cetera. segment. the knew that perspective. quite -- just that levels were alone, talked, volume that we as pre-pandemic 'XX. the industry, into others that's very above kind we came pre-pandemic. this from is efficient we back et other in volume be we comes in been where volume out coming lot able And had XX% of a And the we've of into And the volume our our a some you in actually, from customers, -- year you That's platform to as we our containers benefit the a that reset the

So standpoint. your no question, for surprise volume a to answer us, really Mark, from

for that's that in pet commercializing growth say would and and investments capacity expectations talk think that up I the issue came our only we as there in had be pet we again the But that customers for challenges about us kind well raise in thinking have sets outside normal year would food, of into of some I and their food 'XX. 'XX.

the impact two any talk reduction stores? economy. then And there's about that I'm up across duty-free a business, curious is lot Okay. -- with business. helping Then of of been of like inventory that things portions other efforts real activity on One, and cosmetics ones. dispensing about your just that like particularly heavily quick just significantly, fragrances move also, through travel picking the the things

about talk correction, call. a And did we when last you broadly across the Sure. think the bit speaking inventory the market, about in quarterly that Great questions.

and specialty our dispensing So it does -- impact our segment Custom and closures segment. Container

and year sprayers, -- about correction. think I be you our up Specialty trigger was track as in last lawn sort about I corrections Closure given we through of the et kind the specific those talked we for that the think we're products, the think As -- guidance caught And end retail by that. home of and flowing segment. garden should were care for inventory time on had item Dispensing cetera, and about Those think, of and

ways are So duty-free outset new of component. for retail to us to What been travel pandemic, the working think year with basis, the of more then reach And customers correction travel in to expectations. kind which volumes the airports. end really beauty their our in our them trying Mark, closely roughly global not get very just I but for find I'd And at we customers, chain the sampler than of fragrance getting the us inventory the That's seeing it's to obviously us, in tell long. with to and greater and America that other travel stores. increased and activity in you, all those of one has with necessarily for line in of that related and travel, consumer a when beauty through front is weren't means incredibly were our in only on just and you duty-free product strong customers international platforms the North fragrance obligated be

seeing duty-free growth in retail seen we've folks stores. are we traveling significant and it's So a increased also that channel that, are category the the again, and the at activity from benefit

helpful. I’ll over. Okay. it That’s Adam. Thanks, turn

Mark. Thanks,

of line next Staphos the question America. George from Your with comes of Bank

open. Your line now is

into peer the I under hood, Adam. Good margins details. metal everyone. for Hey, to quarter. for the wanted third guess, the on or Hi, and I Thanks morning.

what I earlier XX%. Margins of better a the good is difficult. a in you it you were bit north So expected think year, and for worth, comparisons we than know actually We said were pack. -- were expecting

appearance, your good terms in good expectation for in volume large despite from So pulled margins, in dollars us sort drop at we understand third extended of anything And of of a And quarter to, drop pack correlate into did should timing strong EBIT got think, quarter fourth can on then you pack? how very was forward volume? fourth help what the you how I that or very least aware into a was third related, the quarter. be in quarter there that

way -- through Great I and back at work questions, George. that. start maybe my the end

because talk QX we of of half So QX. about portion pack, such back you're volume. right. the a the at back is can pack we And Typically, half and our significant talked when about the move the year that between times

pack So what QX pack. I actually would is, throughout yields were tell you good the the

Our products, of had vegetables, kind well a QX. vegetables European think upper tomatoes, core core and Coast of Eastern really as Central good think of West of Midwest think very

mostly good in irrigated. for were pack So QX, a Tomatoes yields us are solid.

We had So reduction an issue. water pack. was planned not the a for in

George, happened primarily pack were QX, ultimately in ancillary that happened, is have. that volume comments that just what to what restocking Just QX. with yields nearly would bit had that QX a related higher the little those per we traditionally my the but I the made pack XXXX. the getting, then given a earlier, We'll And in in of in little not ended have and pack more we we

QX. we're was to we'll outlier crops really come just So it completed through some still in and have it QX, that good in going pack. a the of call It's

veg back standpoint, again, we tell line volume, So from to it what in in were that with you, I'd really, drop right thinking. a was

had system our and as in about commentary, the trying our we to George to cost to support of ultimately, in I'll much a prior Midwest. trying last had you and additional year think You we inefficiency consumers and -- customers into into their cans them food so our support we making market pantries were shipping and kitchens example California, give and great getting that consumers' low the costs

Just that -- normally something not you it's do. would

I'll should of then You've additional we get freight, a year And all earlier additional we the our team than you got levels we is understand, that incremental what would. significant repeat, ton because I'll on margin costs. We've in you've hope thought QX, warehousing. and of pre-pandemic XX% got they tell did drop get a efficient platform that essentially here absorption you pre-pandemic, And eliminated credit it those into just that a I volume you in there very that volume. that had growth operating is versus that

we for that taking that be all of think on we level we overrun more with the the more saw be that last handling out-of-orbit the to warehousing come Container and our that of consecutive I were George, we that, the that to the incremental right? back us now quarter and drop-through taking an the efficient So add business saw inventories recovered sitting it's quarters, sort that and exit of we'll continuing and Remember, cost 'XX, system in last business headwinds margin might just fully all of on continuation, the seeing by will, with to added what the the of year quarter. called that in all on cost out efficient take a time And and getting to inefficiency this top we and if most all Metal Closures we'll Specialty you that relevel is year. allowing where the you're the Dispensing in out we're on sort past We're experienced system through is that is rightsized system. go-forward kind get inventory we and and that point it's out cost benefit of you're that what basis. last of and the setting seeing that freight for its those business,

with that's So high we're levels. not inventory sitting at excess here

the got that that at going is be else recognizing latter there is in the that sort what something inventory release underway management we should that next point, you're you've food year? or program on for of getting on Bob, there

That's been where efficient exactly we teams operations. the back make It's all to it. sure with doing the that core get work our can really we that about base the most be have to

the last it I'll question, and for turn time. My thanks Okay. over

to to trying comment a drivers ultimately expect about rank guess, I across know the to had to Is Is from stack thinking And it in what into, terms to you And the year? for XXXX of? flow. to waiting when you the guys to as outlook I it the made said us volume? well, opposed the next something productivity? cash and you the volume statement you sounds and -- that your free for guiding? for now directionally, Thanks, advise of you your improved luck price that are necessarily quarter So cost? priorities quarter. like that if we Is significant directionally, earnings fourth outlook Is positive it not What above? expect you're are recognizing growth drive you it's year. What segments. particular, in next all outlook it think, of you're you're aside growth, what's going convert why there good in earnings

Great.

I -- several think Number for I coming both couple Bob last in think giving a will years. really, chime So been in George. I and roughly one, quarter answer things. the the year on third guidance we've But of the the here,

just we're our early to We're business So at in plan preliminary process. our give thoughts. trying least very

directional got but details, each kind for kind our of the the of trajectory all have don't we So of we've businesses.

it really Bob to I'll think is, think for our changed there's about turn next what perspective. would year, we that's from say, and I over unit nothing I volumes So

going next volume to That's to for driver us. specialty big you So growth closures, be, that's dispensing about a going and X% year. it, be call think

volume talked be that's that's just about going a If again, be of to good a we next pack. good We've to in and growth going think low pack And single-digit about. another nothing you what year, nice soup. normal It's seen metal growth. lot extraordinary, containers

custom half in year that that deliver and we're we performance continue food. custom a containers. to assuming we're that cycle tune volume to the continuing There market then that the so And a will containers has for through continued is kind the perspective, of pet that item soup XXXX. to we single-digit correction we growth And to about of low reasonable inventory back one believe then growth something volume of includes next in get as from we've the now talked

our did that a in investment to larger to thresholds. we've the for segment. In meet contract. contract investment contracts to not that, It's Custom our renew addition chosen renew was not And Container renewal. required one that significant -- of and return that

little custom improvements opportunities allocate that the elected new we've that business this disciplined year in will we've given that the we're we will containers with investment containers, our business. that other be of other talked and that decline that to timing investment be always kind our criteria, volume our do late we commercialized, we investment as do Container this meet in many in to particular going meet to 'XX. opportunities So of Custom The made will segment, custom ultimately capital have piece lumpy that and have and to maintain call wins associated the it, mid- criteria. a offset of approach, that Within

believe that So certainly that said, run being and digit we all low XXXX. exit as of rate single we

Yeah.

on timing than done. folks we of of have earlier heads typically couple to I'll more we finer to than had One, now a of up trying the So George, other maybe why maybe that. a been sort points just put give recently

think maybe we're even that environment the more I importantly that's in. so, given dynamic

what profit, gets growth take that something in if if said, mid-single I digit Adam just you will. So you like to think operating us a probably organic

is overfunded plan, quite requirement that a obligation -- a the that funded unlikely it's frankly, probably think we'll there have But point I be which other we say at funding we don't look cash that so I'll at and we headwind we we of components, a plan. line as are forward. look now, right the our will to on have in exactly that status out as of right you'd sight pension no we now. think pension some ever is

like derisk a to plan. won't and probably going $X.XX FX largely we we'll be have that tune a and an to see evaluate lower a borrowings we as be a that bit to know for exactly benefit curve get to year. be headwind the Interest that's kind rates headwind something by way. year and the as is up discount also about rate, returns perverse and and does based to sit of Using final forward to a we year. some to now, our on out from average rate what done until projected in and of That's next continue see further year-over-year to opportunities in for plan, prior slightly offset are. that X.X%, rate looks basis, X.X% likely a the things other what that's the the there But about We of derisk it outstanding

now. think improvement. for but interest I a pretty capital We we higher taxes. up backdrop that's forecasting meaningfully from around can and by get final with tax the number that, sizable you law if rate I'd no think Xs our debt changes, that operations, profile been. reasonably out, to assumed offset to think get that flow, pointed a against we've And earnings I partially to and to of expect range. kind you about do looking through of we've Tax, given right as and improved profitability cash CapEx, variable in sort Obviously, consistent we're working rate translates what got free So where we're think than high the of then the be budgets

the Guys, all the over. thanks sort reminder time, Thanks I’ll pre-outlook. of for third that color. too quarter it for turn on and

Your next from of Adam with comes question line the KeyBanc. Josephson

open. now is line Your

questions well? a everyone. one are you Adam, to this on -- put year. bow the volume just Thanks. Good just morning, Hope for

last cans. been? on they any as then same year in the and you three expectations be call, I just are that down, the I changed for containers mid-single full volume said ago the you down of from slightly or had Has volumes to your about think, organic months in food think custom expected closures and

specialty say and we and in containers, I'd For line dispensing they're would closures with custom thought roughly be. we where

that sometime projected, metal up have that the installed of middle in running food the the back Adam, pet and of and customers would gotten for I think containers had we year. their invested capacity our half they've part

So hasn't yet. that unfortunately, happened

was I -- that's that think change. item So would one that the

So we're flat now year the projecting essentially as for versus pet food providing growth.

will just what one push that for containers I that a metal year-over-year the you further an that we little that's versus before. bit guided give comp would had on down So update

Yeah, Adam. The only to the is changed we other initial of one that guidance volumes out relative coming our have Russia. that

So what had and lower much on there, the obviously, that's level with everything operating a early are we at going than we sanctions anticipated on.

So that's of we're a growth probably worth couple that that forecasted originally volume we getting. of points not now

it. Got

year, So for you for metal the just to total, containers high as assuming be clear, so in are down single digit much XX%-ish? as

is digit probably yes. number, Adam, think right high-single I Yes, the

that. question to up In expectation is drag, of clarify pension I -- clarification just mid-single Okay. Bob, something part is want below that to appreciate One not the words, likely going I else, other right? other year, organic it's just growth before that. the pension line. No. next the for EBIT the

it's segment that grow a included we includes pension. will that, And that say offset that that in. pension, So businesses of stuff be very And is again, just be is will it I not when the noncash income our actuarial happens accounting so I right? by clear sort So there. the and item, want the to think

businesses So you'll pension up whatever experience. be mid-single the drag before will

year? may mid-single earnings a drags even little a next with higher. that will FX interest of you be and partially bit that So expect those up offset then But drag. up be will would still

right. That's

Got it.

on commentary volume the Adam, next then, year. And for just Okay.

clearly putting you just it's in next economic given It's to paper there -- not sensitivity I think business But backdrop How we sensitive year. obvious some number cover that economically you're it, the in out up economic you said nonetheless is are DSC there X-ish confident the not obviously. most packaging. that which operating?

business consumer Yeah. do our And Silgan categories essentially would staple for kind our metal And versus that talk model just little a we defensive XX% now and maybe again, while got just about well containers of partners. a contracts with pre-buy Silgan segment throughout us dispensing of remember, mean a what line discretionary of some the your perspective we think also And and plans Dispensing of to Food 'XX across significant I'll well. as whole. supply And what in discretionary. have pre-buy fall all and feel requirements sales -- Beverage like to Adam, impact our bit metal a for of the point, are as that pretty in closures that your Specialty our business good more and have answer businesses. closures look as many in their a that the try sight we Silgan for for especially do nature I and like we've business was to There items Closure quite very And customers' bit. into we

that we're a 'XX. number of will kind going one that got really deliver. I'll is normalize growth confidence good to So that of in we've here sit X% and say And degree that,

ratio are, et in economy, where one that. on cetera? appreciate And for your one really is right Any then in leverage allocation. of capital interest optimal rates just terms given given leverage the which last I now, thinking Bob, change

Yes. good think spot. in we're Look, we a

we We kind by will into pretty here looking year. next year-end with cash good get the time flow of in be a sub-X to increase

next, line getting call are in of sight range XX months it, end we low the So from now. right to of the there's to pretty where the to XX direct good

that. think debt portion given it that we're the an bit okay our about it's But fixed is earnings So we structure, little headwind. of of manageable. a Obviously, -- feeling

sit as we're a path that necessarily here with think today. changing very So comfortable to the leverage. Don't we I see

significantly it feels where be rates flow profile will here today, But business. obviously, the evaluated. and the changes to significant with we have from Now -- are to free okay, particularly of cash

to pulled So as near hard sort that's not perspective, think there's your have think to I I of relates going through M&A either to an because market. term a that it's at weave of deals or been capital it to from bring lot allocation, market in the been least come from what way

look a that just loosening up, into I valuations we the I some like yet. will there in next want year, lot market But who businesses. what sell midyear, people are or M&A And I think a think year and so whether that think of of capital that's to move things But you going there really there's it's as knows. don't some early as lot be and do know to next loosen out

I look. our find think of I of And we'll parts the to portfolio. certainly things So as that would think plenty appetite we attractive have there's

we'll think have model -- things certainly looking as those we do, fit, actively it and our or -- we and or across not could them. we come if down of sense. we'll to those decide And market, of engage either it makes to And can So if drift continue have luxury the if don't being things then about disciplined run return always let those in a patient we at to leverage when whether capital.

and things look So really we the not much at the other maintain sure that making we discipline. changed than right has strategy right the about

Bob. much, so Thanks

Your line Anthony question with comes of next the Citi. Pettinari from

Your line now open. is

Good morning.

You in to -- you picking the of terms mix talked that investment anything And wins just that say -- you meet is business letting of the call out? containers. go up any markets about custom And business the you're of some for you're if in business? can wins there the I'm about end then and business maybe sort and required

question, Anthony. Good Sure.

the segment. Custom So the commercialized wins we a of right a market are technical to bit there of be XXXX have are equipment our beverage kind the that multiple we'll food be focused installed that more also core that new resins be Container but and capital? that business and really competency facilities in we that existing fits in in or will on that handling serve have manufacture only in not the into products. expertise will an Does It require those the

well. where So business last good commercialization over that. about the investment really recent as course we of feel several had facilities in we've of years wins new Also the

a will continue execute as the not not whole than renew and that. care deliver team to we say that the to item, a confidence really lot to item then larger we And that So is more personal expect. chose

criteria. allocate our found we've our meet to capital that opportunities Just other dollars investment

at for economy, like then gave at guidance, especially look slowing what very helpful. And full the guidance it's a year your Got discretionary it. that of when the a we the seems lot you items. than initial higher That's beginning of year despite

Just where narrow high wondering full could swing real are relatively current outperformance or What range. area guide, relative the end the of factors lower low it's getting of your terms biggest understanding maybe in year, to of you year on get a the back when think you higher look end the you do that end? was? And to the the or

the relative inefficiency lot to gotten Yeah. we a you biggest faster to is guidance than Look, the have initial think collectively as I done the job that much a of win, anticipated. and think great teams described I it

coming but of year, a and the were of in good terms I little had the So year. more size of into it getting teams in we to line did going so attack faster that really think job it sort and quantum the we sight even to a of

the the sits So win biggest that's biggest that probably there.

of there terms supply think still out look, In from I one. sits risks as chain here,

gets I year. built significant part the relative think of it the less quarter to in. the to was largely fourth broader it probably than

unless something aware So I that of of of that it kind draconian happens. now. we're apart falls as a much not right something see don't risk really unless That's

little been do the We Yeah. have a QX built resin into have declining. resin bit benefit given of prices

prices resin quarter. So for with the happens we'll what see

right, thing lot as just we've I targets, think that a with potentially that, the through it's course customers working anything would that capital and been only today. don't year inflation of through But maybe as other year Bob, the would see of passed affect a customers' they've the for well. well volumes. all the to our year-end is add We our challenging experienced I

So a quite we're working quarter bit now, to anticipate time through. in with anything left the work closely of them. right there's Don't but still

turn That’s it Okay. helpful. I’ll very over.

comes from question Securities. next Wells Your Fargo

now is open. line Your

Adam, Gabe here. Bob. Good morning,

Good morning, Gabe.

Typically, off of maybe terms and year. material the next either decline kind this views monkey for of around your inventories a you're in piggybacking about or ones the for quick of tinplate. two Any around I on front. tinplate Adam, of customers guess, prebuy purchases to question advance time, in response, last potential kind preliminary raw with talking Just of of in seal delay throes, in the or

or Just there? any thoughts input

if drove prices Yeah. prior back It's a the that look, essentially good question. you QX lot a of go activity tinplate year. a our really of And in of for year that ago doubling with customers,

talked on long of is Gabe, as kind steel you interesting, a really manufacturers. time, what's going forward of that and into steel tinplate a hot-rolled steel to a Wall that XXXX that the large that a there. in specialty And Coast we've and is I Journal that supplier really, closure exited that's in We've we be broader in in the that's indices the our facility North in got see out is to As XXXX. market versus for for look supplier cold-rolled the what's Street product larger with itself a -- ultimately meaningful of to it's a on are to announced business going as West going think kind America

ago, able this support to feel enough year all customers. we all about it the again, was to going year. be So we to product if materials you get our raw supply go good back a are And about of

We have that this to we're confidence have good of raw going a materials really year. the degree

far capacity But the our the America today, coming that dynamics deflation here market, going out tinplate. kind North the of of the we're again, coming global and certainly that's with in sit then so changed And really kind as balance we much as thinking has conversation more there's to way of as not of be to price.

close in are thinking what kind rolling are of But single-digit not in or in certain low being or over we're increases, proposed see geographies. we're anything saw to to prices XXXX. cases, So some some steel increases going what we

again, So talk do of best, efficient metal we lower fight product on because getting doing you best we the means always lowest container and day package customers the know, very to think early food for we're the every most impacts to of it's and as consumers. our cost, about process, in and the a we our inflationary

the So containers for metal I is kind think of Gabe, for as we and today, sit idea. steel here right flattish pricing

that. Appreciate

the quick resin one raw to cost, behavior labor least recover call that. that I commercial or suspect would would competitive that some to negative chain what would as facility Just like one material side, environment, input insurance, terms still trying the maybe you've on cost, extent in I that of of at on some the most out things feedback got characterize anything with falling positive you a these, folks are stickier dynamics of

how curious just So going. that's

Yeah.

you're right. think I

are all place. mechanisms in of trying market to the cost got that I recovery sure we've think in correctly make us those

about talked all I So market to activity just in customer of forward. going we containers of that new those potentially is deliver. require any that Certainly, our don't lot in a the of the on businesses regarding that's investment really items, return cost the lower about see we item not about more

across all really say would of I And competitive activity to So that change commercial that operate or goes think I in. the activity. no business we segments

luck. and you Thank good Understood.

Thanks.

Your of Baird. with Panjabi line next comes the from question Ghansham

open. now is line Your

mean, everybody. XQ. And on in that for margin closures just color, dispensing and a I step more us you do specialty give to bit question, you. to consistency the my is on of What you've saw the could, exceed morning, if Good its margin has back guess I think terms improvement broadly, Thank this of in changed you first as you moves business track expansion some made also, apart dynamic? you business structurally previous portfolio well that in high watermark. drive that from

line talking have been for all that lot when we experienced. have in QX resin was other those folks the long, one the the of to QX that bottom about like of recovering we throughs think you we've we've had well. last as worked is we year mean thing I years And have that couple inflation kind think pass benefit Ghansham, that as benefit a margins, about I finally sure, really a one of hard, lagged Well,

the versus and food So driver. really, a of beverage. biggest you products mean the silicon about that was mix think for you I products good when more have traditional markets of dispensers

think there's lot work gone we quarter and a into the So good of that's that. during margins were

not We've As of volume where of segment as an at capital been perspective allocating continue far those on bit historically, -- from been a out, perspective. levels higher really to only have to are But investments kind focused just segment. organic been we've it revenue as we well. margin quite to grow and this this

we flowing bottom the and with now pleased that's right we're specialty sit closures. hitting with So we through and very think where dispensing line. And

so decrease of you're any inflation for in of second point? calling just affordability that been the this the the larger think and would then my point pushing given in stress business seeing some your CPGs portions just with love this just have at And the packs, advantaged that. context started in consumer very you. value on dynamic, out at the given I on, you question, have hear Got I'd on -- to your thoughts but of

lower I a you higher think mean, CPG certainly, about earnings transcript Yeah. about from volume, can it I price. read just does talk any and

pack, the thing. you're what I more think a talking kind a of value products of that part exactly for maybe smaller similar price sold of is of about amount

But hold customers and through pandemic our you teams our to actually able we've very for what ready many conversation and execute effectively to because alternative think is haven't take yet a commercialize of I format new is, ability products. products. are we're the our So transition tell launch would proven any to an what I of seen that we it for our for

continue think have each segments. across fantastic business and new the our these through we was I pandemic, of to success with wins

probably again, sustainable our products kind of we're to we the It's And think most So a conversation. of market. that the talked solution. ready that or for about for products some are multiuse very actually of early we've I sell

for side looking a of conversation product other on the that were the we versus the were pack, into we little a bit more pack value as putting single So opposite.

much so Thanks Adam.

Sure.

RBC of the Viswanathan Markets. Capital from with line Arun next question Your comes

open. is now line Your

Great. Thanks couple question. for me. A taking my Yeah. from

the just preferences. have business changing the of So consumer question, maybe first the off, to along lines pivoted last also you

label business how is at the maybe this material if much your across of that's segments, point? wondering in private Just three

representation got we've also would I feel label. what private like branded, And question. is, tell we but Good with not good you only at

is going of I bit right the that a Europe. data America but tell and to you that private So only move now think room a label, also in North we not in see there retail would

label; fair more Specialty a Dispensing branded representation with again, our containers, say, and private label private I group, branded between probably actually because aligned products would and metal we're Closures For is and we're same balance But across a private custom the of component good -- and It's that fairly private represented label smaller in market. branded for board thing between pretty containers. label.

we So are seeing it.

the benefiting that across representation are We fair is from as board. pretty our

closures. build? a inventory there you you'd bit that? about a as then holiday smaller that you're little any mean, I to know What's guys fragrance excited about in question season pretty well. I And can portion on market. Is you have outlook another just Thanks. have that gotten the talk bottles into there? that here. you going Maybe into the Are guys

think we Specific which that kind for but time, well really prestige marketplace, represented through. very of that we've touched the market, very go through the hold I cycle of well and some Sure. economic are and end at really to we beauty on up any really fragrance fragrance does luxury

of they luxury happening the and a beauty going excuse products, been planning season fragrance sit They XXXX. and sight today, year. last holiday So mentioned we we I with planning through customers well, the delayed year of product new and then on significant this know portfolio probably for good fragrance next our is 'XX, prestige throughout as kind all for Arun, here we launches and is the new launches level have beverage really line that of call volume what's to of me. of of a product as across in are and have mid And higher pandemic. through have -- fragrance be XXXX

And really demand. high is market there the will be for, have it, do how next And so of line of there the the launched. call And new the nine that time. year we'll we next those through products those incredibly of are and entire months to first a make be then see really, is in transitions sight of half period good But utilization our year. products staged capacity those for

last And just then one.

standpoint? that definitely some headwind significant this of some to capital then inventory had working resin of a I do So when you that tinplate to look combine next of inflation from noted year of of build, back a What year. kind comes what kind the you working you extra the kind you think does capital or maybe and like mean,

Yeah.

'XX sorry. pretty 'XXs drag, So a if in look versus capital, negative capital, working 'XX 'XX -- reduction a significant Yeah, work working significant had reduction 'XX, one drag. that a in you because had at right, than more was

if that think difference. we'll the some I that year-over-year So at get delta balance sheet, is of look -- you

we'll out what I now. negotiations. of capital the think right assumptions side there's hold what's opportunity positive put there that look it forward then is assuming going to the and some now, underlying on cash and would with an raws the the around on through line, side I working think happens wait I right we get working happen to opportunity than see as capital as more those negative we But bring

Thanks.

White Bank. comes Your with the next Kyle line of Deutsche question from

Your open. is line now

as Thanks resilient, been recession but moved the containers, cans morning. viewed has for obviously question. On pet have mix your to Good taking more Hey. food metal food.

might a for performance move pet? more consumers risk in is food human food you as environment a see there Just recessionary food that drive if same potential their the pet curious during or to

couple -- canned wet in about Yes. say I we think, markets good you're in times, Thanks, question. food, dogs for Kyle. also a serve and pet really, It's talking I of cats. two. And food the I've past mentioned would a the We and that small

movement what whole again, typically, the out of not wet dogs to so of and and And small we cats. drive for, category lot a is see

food the think I larger cans country year to the sit the typically volumes about all if significant -- dogs, But challenges that store does food. able are product for customers get the to this shelf wet in dry our least, U.S. not where here the moves at pet enough sit system. pressure the again, because think think customers larger we've kibble with to the now, we or pet product that is I on that's to you have with flattish we the here in talked about, as not today stock-outs there are across as

year. is how a very late this just of throughout have the strong this So year, plays remained the happen going has replenishment that the to very course to we're high to And out, that's remained there has point. really early next but and to demand going demand the see year,

what more Kyle, happened would Yeah. in back I think add just sort customer right, what pet kind our is if I evidence food to where the 'XX of that as you in 'XX, point look of of distribution to at can did kind dogs. see for that the which reversion and size, to was to much bit a the larger cycle through We dry away it little then of really rebounded. larger was from

growth the that the oriented to all of has much our they you customers animals the because they're been. where serving, If more at look that's and mix are today pets smaller

recur, think pets bit larger smaller that -- little pets smaller misnomer we has But replacing a end that households many side, phenomenon day, of pack, more at those certainly they're will pets being at the did that, on a the not So then. same the with anyway, of there. back that adopted level pets, not it the so largely

the react think part, pet years. in over last of couple large much consistently food has we very way So it will the

chain And then you this category, impacting talked your sticking year. with issues it. about throughout Got customers this supply

question has growth potentially two for a as -- resolved curious part well this any internationally. you space food. markets? been that growth and how you that been as you the see potential here organic and space gets beyond in Just pet making on how your next volume investments think get key year space. that wondering much customers you when continued opportunities impacted existing actually just international about Do just underlying I'm that's could growth customer then in view in with Obviously, key investments you in have a

Sure.

food. pet supply the have been in prevalent that chain really our across certainly think issues pretty customers, I

quarter, mitigated that As challenges, call ongoing Kyle, I from think haven't. now in ongoing late it, kind packaging challenges supply. just raw by issues would labor we material its other I of, third have anticipated It's those the been said, they

those we're some going by to very we're our of try get to just closely the of offering issues have our to So resolved solve to working the expertise end customers. They're anticipating now year. and those -- help with

the pet nothing far new talk product some our are we've food. of the As categories And this nothing to future about yet as maybe and by move to But segment that's going really We've some in very our term. new working interesting got metal initial incredibly the encouraged needle things that results. on the customers we se sustainable short the through container that for initiated we've outside got call launches per business. are of with that packages probably

So customers appropriate around in on that when have grown then time future a multinational more pet geographies world, about other food with to And it's to Europe. our talk little come more specific to we the large it. a at

food. and market grow in pet as the in just it's And in are it Europe, Silgan, we a for Europe growing core So continue U.S. in is to there we'll

turn I’ll over. Got it. it

comes of question from next with line Daniel the Jefferies. Rizzo Your

open. now is line Your

me fitting you in. Thank for you and thank

Just at I that it's if where it quick something as point? in the drag tailwind. was I within don't a mentioned of this past wondering know missed of as soup. kind a on kind I out question settling it's a being today, but

Hey, Dan.

QX. was a in So good soup performer actually, really

soup prior So I up versus like was percentage want digit year. something to say high-single

lines interesting about we've then we had pandemic encouraged did. place of that increased dramatically is, one of were there recovery that. seeing that very the pre-pandemic. a So product soup really taking market in was the things before pre-pandemic And volumes soup our talked by in was as the as in been we happened soup, soup And most volumes

for that been broader has high and meals the ingredients they some is consumers are better significantly of repurchase believe that soup that the time. rates our and were repurchase for, resilient. for very to and seen incredibly the products able products through those volume Soup We new than we've reach rates quite for believe customers sort pandemic, particularly for

lot customers, new we're So seeing they're of reach that. a benefits trying marketing and campaigns, they spent of the to money

we're about soup as So we trending very trend to continuing beyond good the is pandemic. -- feeling move where

All Thanks right. a lot.

of line comes Mike Roxland next from the Your Truist Securities. with question

Your now line open. is

the Bob Adam, good quarter. and Thanks, congrats on

Thank you.

question Just one for quick Bob.

can that of variable you have? mention versus the fixed Just proportion Bob, you debt

Yeah.

pack. our seasonality and bit or veg So flexes fruit it little a pack revolver the have the season to because that the of relative the of borrowings we on

XX-XX year-end, like be probably that to fixed at we'd So floating. looks something

During low in probably somewhere the we're fixed. in a year, more little of XXs kind the

fields for California pack, year's impact a on Got look no good. in it. your to this Thank you could you were the be West for that year's And tomatoes tons in they been and maybe in at regarding negatively are year it that that. customers, they mentioned have seem And may the California Coast data, least does affect has as problem it pack, USDA Irrigation the the the will case like even to irrigation. able at at beginning next Mr. been decide the dropped to per Adam, tomatoes you there look then yields as [indiscernible]. plant, about pass to planting However, USDA.I doesn't tomatoes you XX if real it and worsened. estimating think given million about the while of drought impacted farmers was produce And of the of pack have lack

what from I from about pack. to, your to guess, as get impact upcoming the the you're your customers would just the thoughts I and drought So love hearing

because the season are versus into market. And fringe small for tomatoes the tomatoes in canned tomato premium we've agree we part and on products Coast, couple for the canned West Mike, I they said, And XXXX. they your are Coast the or more volume. think actually really with numbers that paste, their pack tomato protected Remember, acreage of of most One, salsa go impacts the tomato tonnage the pack a cetera, are a West products, there's the et premium of markets, So the as of the on the the about total tomatoes that ketchup growing the percentage cans. really markets, things. always

processed there's the that are of we of tomatoes. get the West when same tons XX,XXX on much tomatoes So Coast, canned pretty amount

then for fields allocated your the pack irrigation the point. XX it's tomato of whether So crops really all influence the and And the of or gets canned our that at to XX volumes us. doesn't beginning for tomatoes,

the are all they got that customers of protected. and they're conversations we're they our through 'XX. the kind year be anticipate 'XX that for Again, what allocation next next planning had So The of the required food that and for of food the same now pack water crops expecting And not tomato go -- tomato side on West for to pack expecting a they broader those this happens the amount the change acreage I planted. it year, can can all lot certain will Coast. they we're -- whole can will for that think going year to regardless for of of to normal with tomatoes. a

explanation. you of Good luck Got balance in Thank year. the the it. for

Thanks.

comes with of Josephson Adam line KeyBanc. Your from question the next

open. Your is line

Thanks so follow-up. taking for my much

wondering next requirements-based much confidence demand-wise. their talked canned to just would if to what it -- just them. the to requirements characterize little bring visibility question, peers contracts next visibility based more may going you how And off customer to then but you're a which context much have was demand your think you talking cliff, have to one were likely requirements-based is how is be. earlier out Adam, up your for year one just tell of in contract, you falls a have no going some like I not perked but get And of also because demand ears have contracts, Just or thing, level about year. business I into you turned because in I'm into And about what visibility of the business seems

you kind to can just So concept of explain me? that

Silgan, business really, metal And our of container of Sure. partnership either customers, what production on question. meetings. in or maybe kind model try with sites of And it's focus a a calling we I Adam, we our our are that know, that unique the segment to we'll customers. have answer in mean, think many near I our keep planning And I their sit best-in-class you commercial with to co-located facilities lot as

look as are partnership. in to sure the we as that together demand much of forward the have both both can we much So working about cycles and us information make have for visibility that

like both a help -- both hard our as levels we've trying questions. just give customers. and that's customer I commercial a various lot ongoing We're with outcome we're tremendous the because feel And I companies for to our spending positive of solve I and our team's businesses. dialogue solve throughout asking they're got well end negative credit side for the a of then drivers of time organization, And We're on at the problems. trying the for to day. their the better understanding So

seriously. feel and And And it's the what contain So overused a truly have a that gets we both sides on as quite equation. channels a requirements bit in in sure open do a flowing to They fairness, I partnership it's and customers do it, that that's the how with of our valuable very nature word partnership information very good today's when obligation make are well. of the But obligation customers. we and and contracts, we take do relationships. those communication our think business just we

continuing about if communicate George, I'm changed on this remembering this on Yeah. process alongside. but the correctly, to this terms look to correct you've first your think, that have one just extra, year, Thanks. thought year, in precipitated which me And last in a And of year I years think that future the And that, I you is, reason? you something I third wrong, what gave is then quarter information whatever time earlier, something call follow-up plan was on touched that the you that is exactly? for continued and guess, what there if I'm for following

several -- like doing through we've feel Adam. back given business too, point. and I our for been my we've of years this QX, But at kind first businesses at round each go of gone our I'll look, the planning the of in preliminary notes, look with cycle So this

talking have really share important we information folks do we're how we're do And we it's planning year next that with as that our investors for of -- So it's think I all you and what a we're about look. preliminary and thinking about.

October we was call our better October information might of, I think XXXX. in in in than XXXX late sit it, be it late as

we're are that therefore, sharing that you message forward job communicating better us, a teams we're, and a well. think folks to I message with of as look our doing So getting and

business. good about feel we the So

We've of will through. sight make pretty and should that sure We feel that. we comes got line communicate good

That’s lot Adam. of luck. very Best Thanks helpful. a

Thanks, Adam.

call the Greenlee. turn to now I session. back question-and-answer Adam today's concludes This

We and today to in reviewing company. interest your next Thanks, you. results XXXX the full for and thanks, for of forward late everyone, look Thank January joining Emma, year in year. our

This attending. concludes today's Thank conference call. you for

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