Thank you for joining the Silgan Holdings third quarter 2021 earnings results conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Kimberly Ulmer, Vice President, Finance and Treasurer. Please go ahead. Thank you. Joining me from the company today, I have Tony Allott, Executive Chairman, Adam Greenlee, President and Chief Executive Officer, and Bob Lewis, Executive Vice President and Chief Financial Officer. Before we begin the call today, we would like to make it clear that certain statements made today on this conference call may be forward-looking statements. These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the company, and therefore involves a number of uncertainties and risks, including, but not limited to, those described in the company's annual report on Form 10-K for 2020 and other filings with the SEC. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward-looking statement. With that, I'll turn it over to Tony. Thank you, Kimberly. Welcome everyone to our third quarter 2021 earnings conference call. As you've seen, we had an exceptionally successful quarter, particularly considering the negative impacts from the economy-wide inflation, supply chain, and labor challenges. Even more importantly, we recently completed three compelling acquisitions that will further drive growth and cost leadership in our markets. We remain confident that Silgan has the team, the focus, and the positioning to continue to deliver market-leading earnings growth and superior free cash flow yields. With that, I'm gonna turn over to Adam and Bob to take you through all of this in greater detail. Great. Thank you, Tony. As you saw in today's press release, our businesses continue to perform at a very high level in a challenging environment in order to meet our customers' unique needs, keep all of our employees safe, and deliver strong results for our shareholders. The third quarter was no exception to that. Despite unprecedented inflation and continued supply chain and labor disruptions, the effects of the ongoing pandemic, and tough year-over-year comparison, we delivered a very strong adjusted earnings per diluted share of $1.02 for the third quarter. Demand for many of our products remain at high levels as we achieve record volumes in our Dispensing and Specialty Closures and Metal Containers segments, and the Custom Containers business continues to outpace pre-pandemic demand levels. During the quarter, our Dispensing and Specialty Closures segment benefited from strong volume in the beauty, fragrance, food, and beverage markets. These benefits were more than offset by the impact from the significant ongoing inflation in raw materials and the contractual lag in passing these increased costs on to our customers. Volumes in our Metal Container segment were the highest in the company's history, driven primarily by strong seasonal volumes in our vegetable and pet food markets. This business also experienced higher production costs and operating inefficiencies as a result of continued supply chain disruptions and labor challenges. Our Custom Container segment benefited from strong operating performance and effective cost controls, which helped to offset the expected lower volumes versus the prior year record volume levels. As previously announced, we did complete three strategic acquisitions, two in our Dispensing and Specialty Closures segment late in the third quarter, and a smaller Metal Containers acquisition in the beginning of the fourth quarter, and we are excited to welcome our newest team members to the Silgan family. Our combined teams are hard at work to ensure a successful and seamless integration of these acquisitions, and we remain confident about the prospects of each of these businesses. Gateway and Unicep each provide broad opportunities for continued growth as we expand our product capabilities, product offerings, and customer base in our growing Dispensing and Specialty Closures segment. The Easy-Tech acquisition, while smaller, provides a lower cost and more efficient means to supply easy-open and sanitary ends to our European customer base. While we expect market demand to remain strong and our operating teams to continue to deliver on behalf of our customers, supply chain and labor challenges are expected to continue through the fourth quarter and likely into 2022. As a result of these expectations and the fact that the fourth quarter is seasonally our smallest quarter, we are tightening the range of adjusted earnings per share for 2021 from $3.30 - $3.45 to a new range of $3.30-$3.40, which at the midpoint represents a 9.5% increase versus the prior year record. Additionally, we are again raising our estimate of free cash flow from approximately $400 million to approximately $450 million for full year 2021 as we continue to reduce inventory levels and utilize the tax benefits from the recent acquisitions. Finally, as we take an early look at 2022, given both our and our customer views that the demand levels are holding, we anticipate another year of significant earnings growth, which are expected to exceed the 2021 growth rate before considering the impact from our recent acquisitions. With that, I will now turn it over to Bob to review the financial results in more detail and provide some additional explanation around our earnings estimates for 2021. Thanks, Adam. Good morning, everyone. As Adam highlighted, the third quarter had a number of competing dynamics. Volumes across the board for our businesses were very good as compared to historical trends. Supply chain and labor challenges were pervasive, and inflation continues to impact almost every aspect of our business. Our businesses did an excellent job offsetting many of these headwinds through price pass-throughs, operational performance, and cost reductions. Additionally, we have now closed the three acquisitions that will benefit our businesses going forward. As a result, we delivered adjusted earnings per diluted share of $1.02. On a consolidated basis, net sales for the third quarter of 2021 were $1.65 billion, an increase of $162.6 million or 10.9% as net sales increased in each of our businesses. This increase is primarily the result of higher volumes in the Dispensing and Specialty Closures and Metal Containers businesses, the pass-through of higher raw material costs, and foreign currency translation of approximately $6 million. We converted these sales into adjusted income before interest and taxes for the quarter of $175.2 million after adjustments of $4.1 million for costs attributable to announced acquisitions, $2.3 million for rationalization charges, and $900,000 for the purchase accounting write-up of inventory, versus $177.2 million in 2020 after adjustments of $2.5 million for rationalization charges and $700,000 for costs attributable to announced acquisitions. The decline was primarily the result of the lagged pass-through of inflation, primarily in resin, a less favorable mix of products sold, the negative impact of supply chain and labor challenges, and lower volumes in Custom Containers, partially offset by volume increases in Dispensing and Specialty Closures and Metal Containers and strong operating performance. Highlights of adjusted segment income for each of our operating segments is as follows. Adjusted segment income in the Dispensing and Specialty Closures segment for the third quarter of 2021 decreased $3.6 million- $61.4 million, primarily due to the unfavorable impact of approximately $10 million from the lagged pass-through of significantly higher resin costs, a less favorable mix of products sold, and higher costs associated with labor and supply chain challenges, partially offset by the pass-through of other cost increases, plant productivity improvements, and higher unit volumes. Adjusted segment income in the Metal Containers segment was $96.1 million for the third quarter of 2021, essentially flat to the prior year, as the benefit of approximately 6% higher unit volumes and higher pension income were offset by the negative impact from operational inefficiencies and higher costs associated with labor and supply challenges and the mix effect of more smaller sized cans sold. Adjusted segment income in the Custom Containers segment increased $800,000 to $22.8 million for the third quarter of 2021. This increase is primarily attributable to strong operating performance and cost control, partially offset by lower volumes of approximately 14% as compared to record pandemic volumes in the prior year and a less favorable mix of products sold. Turning now to our outlook for the remainder of 2021. As is typical for the seasonally smaller fourth quarter, we are tightening our range of estimate to a range of $0.10. Based on our year-to-date performance, our current volume outlook, expected operating performance, and the inclusion of the recently announced acquisitions, we expect to be slightly accretive for the quarter, we are providing an estimate of adjusted net income per diluted share for 2021 in the range of $3.30-$3.40. The midpoint of this tightened range represents a 9.5% year-over-year increase. This estimate excludes the impact from certain adjustments outlined in Table B of our press release. We're also providing a fourth quarter 2021 estimate of adjusted earnings in the range of $0.69-$0.79 per diluted share, a 23% increase at the midpoint of the range as compared to adjusted net income per diluted share of $0.60 in the prior year period. In addition, we are increasing our estimate of free cash flow from approximately $400 million to approximately $450 million for the year as we expect to continue to liquidate inventory as a result of tight supply relative to customer demand. We are also expecting lower cash taxes as a result of benefits from the recently acquired acquisitions. That concludes our prepared comments. We can open it up for Q&A. Before turning it over, I'd like to ask everyone to limit your questions to one question and one brief follow-up. If time allows, we'll take further questions from the queue. At this point, [uncertain], I'll turn it back to you to provide directions for the Q&A session. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, press star one to ask a question. We'll pause for just a moment while everyone signals for questions. We can now take the first question from George Staphos from Bank of America. Hi, everyone. Good morning. Thanks for taking my questions. Hope you're doing well. Two questions from me. First, Bob, can you talk about the steel supply chain? If you'd mentioned earlier on the call, I might have missed it. We had some technical difficulties getting in. How's the on-time and full quality ratio in total running for you in terms of your steel supply? And do you project any problems into 2022 in that regard? Secondly, it's the first call that you've had since you've had all these acquisition announcements. Can you give us a bit more color on Gateway, Unicep, Easytech kind of returns you're expecting, accretion, anything that'd be helpful to us sitting here trying to, you know, build out the models for 2022 and beyond? Thank you. Good morning, George. I'll take the first question, and Bob will cover the acquisitions quickly. Regarding steel supply chain. Our Supplier performance did improve a little bit in the third quarter. We were talking about some significantly low on time and full delivery performance numbers in the last quarter. We're in the 50% range now, so it actually got a little bit better through the quarter. Importantly, we're getting everything we need to meet our customers' needs. We're not necessarily getting all the items that we want. And again, as we talked about on the last call, we also are looking to reward those suppliers that are performing well and meeting our needs. We are gonna be making some supply mix changes as we look into 2022, and feel pretty good that we've got line of sight that we're going to continue to get the support that we need to meet our customers' demand. No disruptions. It's getting better. It's not as good as it should be, and it still has an impact on our operations. Bob? Yeah. George, I'll take the sort of the metrics around the acquisition. As you know, to date, we've you know, announced acquisitions of about 758 million on the purchase price side, with about $79 million of acquired EBITDA, and that does include the synergies there. We're feeling good about each of the respective acquisitions that we did, and think we got pretty interesting deals that will give us you know, a lot of opportunity to continue to grow the business along with our customers, and at pretty reasonable multiples. We did get some net tax benefits in the Gateway and the Unicep deal. We're getting you know, roughly $125 million of tax shield there. If you look at the purchase price multiple all-in net of synergies, including the tax benefit, you know, you get an 8.2 on Gateway and an 11.1 on Unicep and a sub-3 on the Easytech acquisition. We think all in all, good transactions for us across the board. As we think about what the accretion looks like, you know, obviously it's early days. We need to see what the forward-looking budget looks like relative to the acquisition profile. We need to finish our purchase accounting. My guess is based on what we know right now, that you know, it'll be modest for the quarter, Q4. By modest, I mean, maybe we get $0.01 out of it for the quarter. Looking forward to next year, it improves pretty significantly. I think we'll get somewhere in the $0.10-$0.12. Again, these are early days. That, you know, that's with a drag, if you will, from the amortization of intangibles. So, you know, the cash earnings of that would be significantly higher. That's great. That's pretty much where we were. I'll turn it over. Thank you. We can now take the next question from Salvatore Tiano from Seaport Research Partners. Yeah. Thanks for taking my questions. The first one is you mentioned that, excluding acquisitions, you expect pretty much double-digit growth in earnings since now you're at 9.5% for the guidance. What gives you confidence on this big step up in earnings given that inflation is still going strong and that your volumes are already very high, so you're facing tough comps? Good morning, Salvatore. It's a great question. As we sit here, like maybe we'll talk about Q3 for just a moment to answer that question. You know, we did suffer $10 million of resin lag unfavorable impact in our Dispensing and Specialty Closures segment. So we know that contractually we'll be passing those costs on to our customers in the next, you know, quarter to two quarters, maybe three quarters, depending on what happens with the resin. We've also had a very challenging operating environment with supply chain disruptions and labor challenges. Not that all of those go away, but we do think that we are seeing some signs of positive performance as we look into Q4 as far as the supply chain disruptions and labor challenges. So we feel good about next year. The Q3 was essentially what we'll call a blowout quarter for our business at Silgan, and it had a couple of very specific items that we don't anticipate will repeat next year. We're feeling good about 2022 and where we are today. Okay. Perfect. The other question I want to ask is, if you can, provide a little bit more color on, the negative mix that seems to have affected you across the board, I think in all three segments. Just looking at, the end markets that tend to be improving from the pandemic, whether that's the traditional food cans or beauty and, fragrance and dispensing systems, these tended to have had a positive margin, sorry, positive mix impact, and now it has turned negative. Why is that? Good question. I'll go through each of the segments for you. We'll start with Dispensing and Specialty Closures. Again, some of this is because we're doing a comparative versus last year. You have to think about last year and really the surge and the products that we supplied to the health and hygiene markets. You're talking about pumps and sprayers, hard surface cleaners, those types of products. That will also apply to our Custom Containers business here in a moment as well. Those products surged last year from a volume standpoint. Fragrance and beauty struggled a bit last year, as we talked at great length about. What's happened this year is you've had a reverse of those trends. Fragrance and beauty are recovering and recovering very nicely. We have an inventory correction kind of in the hand sanitizer and hard surface cleaner markets. We've also had continued strength in our food and beverage market. When you put those components together, our flat cap business with continued growth does inherently have a negative mix across the segment. It's as simple as that. When you get to the Metal Containers business, we've talked for quite a long time about the growth in pet food and smaller cans. That does continue, and that is driving the unfavorable mix or less favorable mix as we describe it. Custom Containers, again, it's much more about what happened last year. If you turn the clock back, you know, nine to 12 months ago, any product that was available in a bottle or Custom Containers format was being used to fill for hand sanitizer products as we were getting those products out into the market. Those margins were quite good because literally anything that was available on the floor, on the shelves was sold for hand sanitizers. You know, now we've got more of a normalized year where that volume is not recurring. As you saw, we were up 14% in Q3 last year in Custom Containers volume. We're down 14% this year, so we're at the pre-pandemic levels, and you're seeing a much more normalized mix of products. Okay, great. Thank you very much. We can now take the next question from Adam Josephson from KeyBanc. Thanks, Adam and Bob. Good morning. Hope you're well. Adam or Bob, one more question about next year, your commentary about next year. Can you give us some sense of what your volume expectations are embedded in that growth to which you guided? Are there any below the line or non-operating benefits that you're expecting? Just if you could flesh out a little bit more where you think the EBIT and perhaps below the line growth will come from beyond just getting back the resin lag that you've experienced this year. Hopefully, the operating environment will be a little more normal. Anything else would be helpful just to give us a little more context. Hey, Adam. Before Adam takes the detail of the question, I just wanna be careful here that this isn't necessarily our formal guidance, right? We're just trying to give you an indication of where the business is headed here. There's a lot of work to do between here and when we provide actual guidance. Right. Totally agree, Bob. As we're in early days, you know, where the preliminary volume. Again, we'll kind of go by segment for you, Adam. I mean, in Dispensing and Specialty Closures, we'll see much more of kind of our normal long-term kind of growth rate before the addition of the acquisition. So call it 4%-5% in Dispensing and Specialty Closures. You go to Metal Containers, I think interestingly, you know, at this point, we're projecting down volume, flat to down volume. We had a very nice pack in Q3 of 2021. We're expecting next year to have a normal pack. Soup has been more normal in 2021, and we expect soup to have a normal soup season next year as well. We'll have continued growth in pet food. You know, I would say think about Metal Containers as flat to down slightly. Our Custom Containers business, we continue to win new business awards and have success in the marketplace. We've got a couple of new items coming on board next year that will drive growth in that 2%-3% range for next year as well. What I have to say, just in summary, that's against record volume essentially in all three of our product categories. We feel pretty good about where we are. As far as the resin lag you mentioned, we are expecting resin to recover. In fact, we're expecting resin to recover a bit here in Q4, where we do pass through some of those incremental costs to customers. I think those are the big items. The operating inefficiencies we discussed, you know, we're gonna continue to get better, and we'll continue to chip away at those, which we are already. It is having a negative impact on us in 2021. Yeah, I'm sorry. Go ahead, Bob. Yeah. I was just gonna finalize your question there. There really is nothing below the line at this point. Okay. That's what I was getting at. That we would point to. I appreciate that, Bob. Just on the acquisitions and the leverage. I think your pro forma leverage will be at about 3.5x a year, and that's basically at the high end of your long-term target range of 2.5x-3.5x. Should we assume that you'll stand pat and just get your leverage back down to the 3x or 2.5x range? Should we be surprised if you announce more sizable acquisitions and lever up to 4x or higher in the foreseeable future? Thank you. Yeah. Look, great question. I think you got it about right. Obviously, the leverage at the end of the quarter looks a little bit higher because you've got all the acquisition borrowings and none of the earnings essentially, right? Spot on a pro forma basis at the end of the year, we'll be, you know, sort of right at the high end of the leverage there. We think these are really good acquisitions. Our focus will turn at least near term to making sure we get the integration in hand. I don't suspect that there's any real challenge there, but that'll be our priority. The nice thing is, given where we sit and given the free cash flow profile of this business, our hands are not tied relative to other opportunities that may come our way. You know, that said, our priority is to make sure we get the integration done, but, you know, we're not taking our foot off the accelerator, so to speak, in terms of making sure we understand what the opportunities out there are. Thank you, Bob. We can now take the next question from Anthony Pettinari from Citi. Good morning. This is actually Bryan Burgmeier sitting in for Anthony. You did a few acquisitions in a relatively short period of time. Did anything change in M&A markets, or have your internal views towards M&A changed in any way? Or is this just a matter of timing and a bit of coincidence? Yeah, I would say, quite honestly, these are straight down the middle of the fairway type acquisitions for us. Nothing has changed in strategy or in financial discipline. Got it. Thanks. Do you have any early thoughts on CapEx for 2022? You know, you did the handful of acquisitions. The business has grown organically in the last two years. I'm just trying to think about baseline CapEx for the business moving forward. Yeah. Well, look, it's probably early to put a fine point on it, but I would say directionally probably up a little bit on a go-forward basis because of the acquisitions, but not materially. Got it. Thanks. I'll turn it over. We can now take the next question from Gabe Hajde from Wells Fargo Securities. Hi, Adam. Good morning. Hey, Gabe. I was curious if you could address maybe tinplate inflation. I know those negotiations, I think, at least, start right around now. Some of the things that we've read seem to suggest pretty big numbers going into next year. I'm curious, two things, one, when we think about, again, consumer demand, elasticity, if and food inflation, have you guys, I'm sure you have thought about that as part of providing your preliminary 2022 view? To the extent consumers trade down, is that a net positive, I'm assuming, yes, for Metal Containers? Maybe help us understand how it could filter through the other two businesses. Potential for your customers to do anything, I guess, wonky with inventories is the technical term, in and around the steel buy. I suspect the answer is no because of availability, but just asking the question. Sounds like a very educated question, Gabe. I think you're right on just about everything that you mentioned. The one exception may be just the timing of the negotiations of the tinplate buy for 2022. You're right. Typically, we would start a little bit later, about now. We've been in the throes of this negotiation for some time. We are looking at substantial inflation across the world for tinplate. Our expectations are. We're getting proposals in the 50%-100% type increase range for tinplate products. 50%-100%, that is unprecedented in our time with the business. You know, we have factored that into our assumptions for next year. I think the quick conversation around that is we understand and are very sensitive to what that means for consumers and what it means for our customers in food cans. Yes, we have the contractual rights to pass that through to our customers, but we're fighting like crazy to number one, get them the supply of raw materials, 'cause that actually is the bigger issue right now, is raw materials are incredibly tight. I will answer one of your other questions and say we're getting what we need, not necessarily what we want. Raw materials tight at the end of the year in 2021, we don't believe it's going to allow for any pre-buy activity from us or from our customers at this point. Really it's about locking in the supply. Because we believe the supply is so critical for next year, we did start the negotiations earlier, and we have contracted a couple of our suppliers on tinplate for 2022. We have line of sight into that extraordinary inflation that we're talking about. You think about the store shelves, it's very likely food is gonna go up, but the food can is not unique in that scenario. We're seeing inflation across all substrates. We feel terrific about the food can proposition and value that it provides consumers, not only from a cost standpoint, but getting nutrition to the consumers in a very efficient, cost-effective way. It's gonna be a challenge. We're right in the middle of it right now. We've included those items in our assumptions for 2022, and we'll keep fighting the fight for our customers. Great. Thank you. Then, I guess just capital intensity. I'm assuming that not much associated with Easytech, and I think Gateway was a single facility operation. But just, I know you said directionally higher, Bob, but is that a $10 million-$15 million kind of annual number that we should be thinking about for capital associated with all three acquisitions? Yeah. Well, maybe I'll walk you through it. I think on the Easy-Tec side, it's quite the opposite, right? This is an opportunity for capital avoidance for us, because of the open capacity that they have there. So that one won't be a driver. I think on the other two, they're well capitalized, really good platforms. The question will be around CapEx, is how fast does growth come? And obviously we will certainly invest into that growth as it comes. So I think that could be either side. But again, we're not talking about large dollar CapEx, you know, spend here. So I think on the margin it'll be up a little bit, but not significant. Thank you, and good luck. We can now take the next question from Anojja Shah from BMO Capital Markets. Hi, good morning. I just wanted to stick with that topic of the recent acquisitions. We were very impressed by the margins, particularly at Gateway and Unicep. Could you give us any more detail on the product lines that are contributing to that kind of margin, and then how you think you'll be able to improve on that? I think for Gateway, you said $2 million of synergies. Good morning. Very excited about both businesses and the products and the operating footprint that come into the Silgan family. Specific to Gateway, really it's integrated dispensing packages. It really starts with the closure and, you know, in some cases, they've expanded beyond the closure to meet a customer's unique need for an entire package. But these are functional packages, which we think is really important. As Bob mentioned, they're very well capitalized, so they're very efficient in how they manufacture those products. Really those two in combination are the drivers behind the margin rates that we see at Gateway. We do have incremental capacity available to us at Gateway, which is what Bob had just covered for you a moment ago. It's not so much about improving the margin at Gateway. What we're looking to do now is to grow into the capacity that they have and grow the EBITDA that way. I'll transition over to Unicep quickly for you. Unicep's a very exciting venture for Silgan as we go further into the healthcare markets where we already have a reasonable position as well. Again, Unicep has open capacity for growth, and so there are two functions with Unicep. It's a healthcare business, number one, healthcare and diagnostics. Number two, the open capacity. As we fill that open capacity, it's across shared customers and it's in markets that support the kind of margins that healthcare businesses have. We feel really positive about the impact that we're going to have in utilizing the capacity in both businesses. As Bob talked about with Easy-Tec, the third acquisition, that is much more about a cost avoidance, capital avoidance, fill capacity for existing customers in the European market as well. Great. Thank you. That's very helpful. For my second question, if we could just switch over to the European food can business. You mentioned a really strong pack in the U.S. Can you talk about what you're seeing in Europe and maybe the setup going into next year? Sure. Just maybe as a reminder, our European food can business, we really are central and eastward facing. I'm not really gonna talk much about the packs in the Western part of Europe. The packs in Europe were good, all the way through to Russia. Sweet peas and corn were good across the board. Now I will go a little bit further West, but the Italian tomato pack was very good. Peaches were good as well. I wouldn't say a boomer, but just sort of right in line with our expectations for the European pack. Great. Thank you very much. We can now take the next question from Arun Viswanathan from RBC Capital Markets. Great. Thanks for taking my question. I guess, you know, first off, just on the raw material inflation, have you seen any kind of relief? What's your expectations, I guess, for resin as we move into 2022? It does appear that there's been some moderation in polyethylene in the last couple weeks. Then again, maybe you can also just help us understand kind of inventory-wise, where you are or maybe, you know, your suppliers are, what you're hearing from the market, as well. Thanks. Sure. Just resin specifically, maybe just going back. You know, the forecast from the indices in our last quarterly call projected resin to start falling in Q3, to reach its peak and fall in Q3. That did not happen. In fact, they continued to inflate during Q3. You're right, in the last couple of weeks, we have seen what we believe is a little bit of the crest, if you will, and we're now projected to have falling resin prices, modestly falling resin prices in Q4. That is part of really, you know, the impact of our Q3. That was how we were going to get to the high end of our guidance in Q3, is if resin prices abated. That's also why we trimmed off the top part of our guidance for the fourth quarter and full year. As we then turn to 2022, the indices again, and I'm just going straight from the indices, it does call for resin prices to abate. Now, you know, we'll see what happens, with, you know, feedstocks and natural gas as a component to refining, oil to get to resin. But as we sit here today, we think that, you know, we've got our appropriate pass-throughs, and it may be lagged as we're dealing with in Q3, but we'll pass those costs on to the market. Okay, thanks for that. Then if I could just ask maybe a question on demand for each of the segments. In closures, you know, it looks like there has been some recovery in some of the markets that were impacted, I guess, through the pandemic on the beauty side and fragrance side. I guess first, maybe you can just update us on what your outlook is for that area. Then in metal, I know we've gone through a couple odd periods here where, you know, you saw some pretty robust growth last year, and we've seen, you know, maybe some shift as, you know, reopenings, you know, increase. Just lastly, on Custom Containers, again, there was also, you know, a lot of, you know, positive, I guess, from, you know, sanitizers and so on, but, some other areas as well. Maybe you can just kind of update us on your outlook and if there was any kind of COVID pull forward, in any of those segments, if you're kinda concerned about that as you go into 2022. Thanks. Yeah, really good question. I'll try to come back to each of the segments to answer that. What I would tell you is the COVID pull forward, that all happened last year. You know, for us, you know, I think the COVID surge happened last year. That was favorable for many of our products from a volume standpoint. We'll go into fragrance and beauty here in a second, but that was favorable in food cans. Again, our all-time record volume in metal food cans just happened in Q3 of this year versus the prior record, which was Q3 of last year. You know, I think we're past the point of having a real COVID surge impact to our businesses. When you go back to fragrance and beauty, what I would tell you is we came into the year expecting a 50-ish% kind of recovery. It happened a little faster and a little stronger than we anticipated. The nice benefit we've seen this year is it's recovered to about 70%, and we're holding that number for the full year, and then continued recovery, obviously, in 2022 back to kind of historic levels. As far as the Metal Containers business, you know, I again, I'll just say it was all-time record volume in the quarter. There was a good mix of at-home consumption and kind of the institutional volume that supports restaurants. Nothing out of the ordinary there, except for possibly a very strong pack in the U.S. market. When you think about Custom Containers, again, it was really more about last year. The surge that happened last year in getting containers to fill hand sanitizer products was tremendous. It was 14% growth in Q3 of 2021. We're still looking at pre-pandemic levels of growth in our Custom Containers business and feel good about where we're going. It's just we're cycling over that surge period from last year, and I think that's the most relevant point. Okay. Thanks for that. We can now take the next question from Alton Stump from Loop Capital. Great, Adam. Good morning, and thanks for taking my question. You know, just wanted to ask on the food can volume growth of 6% off of a 14% growth number from last year. Obviously, you know, it was a strong vegetable pack season. As you referenced, you know, also pet food is still strong. I'm surprised at that kind of a number, given how difficult the comparison was. You know, was there anything else going on in the quarter outside of, you know, of those two factors that you mentioned that, you know, kind of led to the, you know, even with the softer period, you know, without peers' strong performance in the quarter? It is a great question, Alton. Really the simple answer is no, but I think we have to talk about it a little bit more. You know, we've talked a lot this year about how, you know, through the pandemic, we were able to reach new consumers for the food can. There have been a lot of marketing campaigns targeted at new consumers for the food can. Really, the repurchase rates are very high for those new consumers. We do think that there's an engagement with consumers, and we've been talking about it all year, that appears to be sticking. You know, who knows what that will mean going forward. When you think about our record volumes that we're experiencing, we will have a record year of food can volumes for Silgan. You know, we're not surprised actually. We've talked about pet food continuing to grow over the years. We've talked a lot about the pack. We had a nice bump in the pack in Q3. Everything else is really on a slightly elevated, but I would just say normalized level at this point. We feel very comfortable in our food can position and the growth rates that we're looking at going forward. Thank you. Just as, you know, I kind of follow up to that. I mean, have you seen any evidence year to date that consumers, you know, as the market's reopening up, you know, last couple quarters, you know, did that actually mean that they are going out more, you know, therefore not eating, you know, at home as often, but, you know, clearly your results would suggest that, you know, is not happening. You know, have you seen any evidence of kind of what the at home versus away from home, you know, kind of food consumption, you know, trends look like for consumers year to date? Well, year to date, it's a tough question to answer, but I'll take a shot at it. I think the first thing is over the last several months, maybe even quarter, as things have opened up, there has been more consumption on premise in restaurants. That's one thing. That's definitely happening. I think you still have a component of the workforce that is working remotely. Actually the data that we have says home consumption of food and meal occurrences in the home is actually up versus prior year, excuse me, not versus prior year, versus the historic norm. We think that's a very positive statement for the food can. We're continuing to evaluate that as we go forward, but it's sort of the best of both worlds. The reopening is happening. Restaurant consumption is driving certain components of our business, in volume growth. You've got at-home consumption that's staying at a very elevated rate. Great. Thanks so much for the call. I'll hand it back to you. We can now take the next question from Ghansham Panjabi from Baird. Thank you. Hey, Adam, maybe a question for you, related to the supply chain, you know, constraint narrative that's propagating throughout many different supply chains, including yours. Just curious as to how that's changing your order patterns, if at all. You know, you mentioned customer optimism on 2022. Give us some color on that. Is that supported by higher backlogs and order visibility versus what you would normally see? Related to that, just given the shipping chaos and so on, and some of the products from, you know, dispensing that may be imported from China, are you seeing more sort of inbounds as relates to more localized sourcing specific to that? Sure. Good questions. You know, when we think about the supply chain, you know, it's a difficult time right now because you've got in our metals-based businesses, we're staring at a wall of inflation that's going to come through on raw material pricing. Unfortunately, you know, our customers frankly would like to buy more. There's not enough raw material to manufacture products for them. The order book is fine. It's as stable as it's always been. Again, we've got requirements contracts. We're meeting their needs, but they would like to buy more, we'd like to make more, it's just not available to us. I say that on a global basis for the metals business. When you think about how we source our raw materials, we do source in our local markets for the most part. You know, steel for the U.S. typically comes from the U.S. market, Europe's from Europe, etc., China is from Asia. You know, we typically manufacture our products in the local economies as well. Fortunately, we're not quite as subject to that global issue in logistics and moving products around the world. We certainly obviously have some parts that we do ship around the world, but largely we're in country where we supply, where we manufacture. I think we're a little less exposed there than maybe some others. I think as we view it's a tremendous opportunity to locally source those products that we manufacture locally. Okay. Terrific. In terms of your own utilization levels, I mean, you ran pretty hard last year. You're running pretty hard this year. Inventory seemed pretty low, as evidenced by the free cash flow adjustment with, you know, as it relates to working capital. How are you sort of planning for production next year, and how does that influence your capital plans and just freeing up bottlenecks if you need to go in that direction? Well, I'll talk first about 2021 and what we're doing in 2021. With that, you have to go back to 2020. Last year, the height of the pandemic, our customers were trying to increase their own efficiencies and throughputs. They did limited SKUs. We had fewer changeovers across our entire business. We had an incredibly efficient operating system last year. There were limited SKUs. That helped get more product into the market, made perfect sense. As you now turn the page to 2021, what we're seeing is we now are repopulating those SKUs that were taken off of our customers' order books last year. We do have more changeovers. We're slightly less efficient than last year just in managing the order book that we have with our customers. It's just more normalized to what we've typically done. That's how we're planning. Our 2022 preliminary look is that it's just gonna be a more normalized pattern where we have typical run rates and changeover rates for all of our businesses. Thank you. We can now take the next question from Kyle White from Deutsche Bank. Hey, good morning. Thanks for taking the question. I wanna talk about Metal Containers and labor. Obviously labor has been an issue for everyone, and I believe your overtime hours have been up. Are you seeing any moderation on this? How are overtime hours now relative to historical periods? And has finding labor been more challenging since the last quarter? Great question. We'll start with the first one. I mean, we have had significant overtime. As we've talked, we've been, you know, essentially running all out since the early days of the pandemic. I would also tell you that's in most of our operating facilities, not just for Metal Containers. Certainly for Metal Containers, that's true. As we now look forward into Q4, we are going to take some downtime in Q4. Not only do we need to continue to perform the maintenance of our equipment to make sure we can meet all of the needs of our customers next year, our employees need a little bit of a break as well. That is something that we're planning right now for Q4. As far as labor availability, it's been a challenge all year. I think one of the hallmarks of Silgan is we identify those challenges, and we put really good plans in place to address them. We're seeing progress now on the, I'll say maybe the availability of labor, but getting new folks into our system, we're having success. It's not perfect yet by any stretch, but we are making progress. I think that's an important point. As we go towards next year, those overtime hours, we're anticipating them coming back and having it be a more normal operating year platform for us in 2022. Got it. Can you just provide some color on dispensing volumes, particularly with Albéa and Beauty & Fragrance? How has the pace of recovery gone in the third quarter and into the fourth quarter relative to your expectations? Has there been any kind of slowdowns on the pace? No, I'll talk broadly. I mean, the businesses are fully integrated now here. We're well over a year past the acquisition of the Albéa business. What I would tell you is if you go back and you think about the surge that we saw in dispensing systems and custom containers for products like hand sanitizers and hard surface cleaners, you know, there was a rush to buy everything that was available at the height of the pandemic. Our customers probably overbought for some period of time. We've been in an inventory correction for those specific products now. For the most part, it was in Q3. We're starting to see the signs that inventory correction might be coming to the end, and we think that the volumes will normalize from there for those products. As I said earlier, the fragrance and beauty recovery this year has been terrific. It's above the expectations that we had at the beginning of the year, and we think we'll have recovered upwards of 70% of the volume in the units that go to the beauty and fragrance market for the Dispensing and Specialty Closures segment. Got it. Appreciate all the details. We can now take our final question from Daniel Rizzo from Jefferies. Hi, thanks for fitting me in. You just mentioned taking some downtime in the fourth quarter. I was wondering if that's like a pull-forward, whereas you're taking downtime now because it's run out, but it was something you would likely schedule for next year or the year after. No, I think it's more just a function of we've been running really hard for 18 months. Again, we have to do maintenance to keep our equipment in top operating shape. It's just we actually have the time right now to do that in Q4, and we're taking advantage of it and also giving our employees a bit of a break. Okay. Last question, you mentioned a lot about, you know, taking price and catching up with raw materials and input costs. I was wondering if you're able to take price beyond that. Will you offer security of supply? I was wondering how much your customers are willing to pay up for that. It's a really good question. Our business model for a long time has been, you know, we pass through the cost changes that we experience in our businesses. I'll tell you, given the supply chain, the capacity utilization that we've had, we have exerted some price power in our businesses where we've elected to do so. I think if you go back to our Custom Containers business and the margin, you know, ramp up that we've seen over the last an number of years to current state, we understood that our business was not performing, and we did go after price in the market and offered a unique value proposition to our customers, a combination of price, service, and engagement, that we thought was better than the alternatives in the marketplace. We do have some pricing power. Again, it's not necessarily the business model that we've had, but we've got some. Hey, Daniel, I might just put a finer point on that for you. It's not one size fits all for our business because we've got a high degree of contract business through our portfolio. What Adam was referencing is obviously where we're giving up capacity for customers that are not under contract, we are certainly getting those opportunities. Where we're under contract, we are operating within the confines of the contract. It's a bit of a mixed bag. Okay. No, that's very helpful. Thank you very much. That concludes today's question and answer session. Mr. Greenlee, at this time, I would like to turn the conference back to you for any additional or closing remarks. Great. Thank you very much, Kian, and thank you all for your time today and your continued interest in Silgan. We look forward to discussing our full year results for the year 2021 in January. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.