Good day, and welcome to the Silgan Holdings third quarter 2023 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Alex Hutter, Vice President of Investor Relations. Please go ahead, sir. Thank you, and good morning. Joining me on the call today are Adam Greenlee, President and CEO; Bob Lewis, EVP, Corporate Development and Administration; and Kim Ulmer, SVP, CFO, and Treasurer. 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 involve a number of uncertainties and risks, including, but not limited to, those described in the company's annual report on Form 10-K for 2022 and other filings with the Securities and Exchange Commission. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in the forward-looking statements. In addition, commentary on today's call may contain references to certain non-GAAP financial metrics, including adjusted EBIT, adjusted EBITDA, free cash flow, and adjusted net income per diluted share. A reconciliation of these metrics, which should not be considered substitutes for similar GAAP metrics, can be found in today's press release, available in the investor relations section of our website at silganholdings.com. With that, let me turn it over to Adam. Thank you, Alex, and we'd like to welcome everyone to Silgan's third quarter 2023 earnings call. The third quarter delivered strong performance that was consistent with our expectations, despite continually challenging market conditions, and we reported our second highest quarterly earnings as our businesses managed their costs proactively to offset softer than expected volumes in the quarter. During the quarter, we finalized our previously discussed plans to improve our cost structure and have announced a $50 million cost reduction program through the end of 2025. We expect to achieve these cost reductions through a combination of footprint rationalizations and other cost reduction actions, with benefits in each of our reporting segments over the next two years. Additionally, we believe these cost improvements will help position the company to continue to meet the unique needs of our customers and compete and win in the markets we serve. Through our disciplined and balanced capital allocation process, we've repurchased $155 million worth of Silgan stock during the quarter, bringing our year-to-date repurchases to $175 million and putting the company on track to return over $250 million to shareholders through a combination of buybacks and dividends in 2023. Turning to trends in the business, demand for our high-value dispensing products remained strong, with mid-single-digit growth for these products during the quarter that drove significant mix improvement for the company overall in the Dispensing and Specialty Closures segment. We continue to see recovery in products that experienced post-pandemic destocking last year and benefited from strong organic growth in our fragrance dispensing products for prestige markets. The consumer destocking we saw develop near the end of the second quarter across all three segments expanded during the third quarter, as these plans deepened in the food and beverage markets and grew to include adjacent categories. Importantly, all market indications we have continue to show that consumer-level demand for our products remains robust, and our customers' inventory unit levels are trending below historic levels as their focus remains on the absolute dollar value levels of inventory in their systems at year-end. Turning to our third quarter results, performance in each of our segments was consistent with our expectations, with mid-single-digit adjusted EBIT growth, driving record results in Dispensing and Specialty Closures, and with Metal Containers adjusted EBIT comparable to the prior-year record levels. In Dispensing and Specialty Closures, our high-value dispensing products were a highlight for the quarter, with mid-single-digit volume growth and a significant mix benefit that more than offset the headwinds we've talked about in food and beverage end markets. Domestic food and beverage volumes were flat year-over-year, as customer destocking in the United States had a more pronounced impact on our volume than we anticipated in our guidance. International food and beverage volumes remain challenged as a result of the increased levels of inflation on premium products, in particular for metal closures on glass packages. Despite these headwinds on volume, the growth in dispensing products, mix benefit and strong cost management drove record performance for the segment in the quarter. In Metal Containers, we again delivered strong results despite softer than expected volumes. Customer destocking priorities appear to have expanded to include adjacent categories, including pet food, and many customers are targeting further inventory reductions in categories that we were already anticipating these trends. The North American fruit and vegetable pack was delayed due to late plantings, and volumes in Europe were below our expectations due to lower fruit yields and the impact of flooding from Greece. Overall, the 2023 crop will be below our expectations as only a small amount of volume will be packed in the fourth quarter despite the late start. Despite these headwinds, our team offset the volume shortfall from a profit perspective with effective cost management and drove results that were consistent with our expectations. In Custom Containers, results were below prior year, but consistent with our expectations due to the impact of customer destocking, including the delay in commercialization of new business wins. Turning now to our expectations for the fourth quarter and the full year. We have revised our estimate for full-year earnings to reflect deeper and more pervasive customer destocking priorities in the fourth quarter, which has resulted in a lower volume outlook in our Metal Containers, in Dispensing and Specialty Closures segments. We believe the continued progress we have made with regard to our strategic priorities and the actions we've taken to effectively manage the factors that are within our control, position the company to return to earnings growth in 2024. We see positive signs in our customers' promotional activity, inventory unit levels trending below historic norms, and while we expect market volumes to improve in 2024, we are not dependent upon it to deliver earnings growth. We'll continue to manage the business in a disciplined manner, focusing on meeting the unique needs of our customers while delivering a compelling value proposition for our shareholders. With that, Kim will take you through the financials for the quarter and our estimates for the fourth quarter and full year. Thank you, Adam. Net sales for the third quarter of 2023 were approximately $1.8 billion, excluding non-recurring sales associated with Russia in the third quarter of 2022. Third quarter of 2023 sales declined 7% from the record prior year period, driven primarily by lower volumes in each of our segments, partially offset by the pass-through of cost inflation. Total adjusted EBIT for the quarter of $214.4 million, decreased by 4% on a year-over-year basis, with record adjusted EBIT in the Dispensing and Specialty Closures segment, offset by lower adjusted EBIT in the Custom Containers and Metal Containers segments. Adjusted net income per diluted share declined $0.12 from the record achieved in the third quarter of 2022, with higher interest expense of $0.90, non-recurring sales associated with Russia of $0.30, and lower volumes driving the year-over-year decline. Turning to our segments. Dispensing and Specialty Closures segment sales declined 2% versus the prior year, excluding a 1% impact from Russia sales, primarily as a result of a lower volume mix of 3%. The decline in volume was driven by double-digit declines for higher volume closures for international food and beverage markets, which more than offset record volume and higher value dispensing products, which grew by a mid-single-digit% compared to the prior year. Record third quarter of 2023 Dispensing and Specialty Closures adjusted EBIT increased $5.4 million versus the record achieved in the prior year period as a result of improvements in mix in the segment due to a higher volume in high value dispensing products and lower sales in high volume closures for food and beverage markets, as well as effective cost management, including SG&A. In our Metal Containers segment, sales declined 8% versus the prior year, excluding a 2% impact from Russia sales, due to lower volumes across all product categories as customer destocking priorities were more pervasive and impacted adjacent categories, with the largest year-over-year decline in the soup category. Fruit and vegetable volumes were below our expectations. Metal Containers adjusted EBIT was slightly below the record level in the prior year quarter, despite the shortfall in volumes as the business continued to successfully pass through labor and other manufacturing costs while actively managing our cost structure. In Custom Containers, lower volume in most categories drove volumes 10% below the third quarter of 2022, which, coupled with lower resin costs on a year-over-year basis, resulted in sales 18% below the prior year period. As expected, Custom Containers adjusted EBIT declined $11 million as compared to the third quarter of 2022, primarily as a result of lower volumes due to customer destocking and a less favorable mix of products sold. Looking ahead to the fourth quarter, we are estimating adjusted net income per diluted share in the range of $0.55-$0.65, which includes higher interest expense of $0.60 per share and a fourth quarter weighted average share count of approximately $107 million. On a segment level, fourth quarter adjusted EBIT is expected to be higher than the prior year period in Dispensing and Specialty Closures, comparable to the prior year period in Custom Containers, and lower than the prior year period in Metal Containers, primarily due to the timing of previously discussed benefits from inventory management in the prior year. As a result, we are revising our outlook of adjusted net income per diluted share from a range of $3.40-$3.60 to a range of $3.30-$3.40, primarily due to a more pervasive customer destocking in food and beverage and adjacent markets. This revised estimate includes a year-over-year headwind of $0.33 per share for interest expense, which we now expect to be approximately $175 million, a tax rate of approximately 24%, and weighted average shares outstanding of approximately $109 million. These estimates exclude the impact from certain adjustments outlined in Table C of our press release. Based on our current earnings outlook, we are also revising our estimate of free cash flow in 2023 from $375 million- $340 million, which incorporates CapEx of $230 million. Revised outlook for free cash flow reflects the revision in estimated earnings for the year, as well as estimated cash costs in 2023 associated with the announced cost reduction program, including additional working capital to facilitate the program. That concludes our prepared remarks, and we'll open the call for questions. Anna, would you kindly provide the directions for the Q&A session? Yes, thank you. And 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. If you may remove yourself from the queue at any time by pressing star two. Once again, that is star one if you would like to ask a question. And we'll take our first question from Ghansham Panjabi with Baird. Hey, guys. Good morning, Adam, I guess, you know, first off, maybe you can just give us more color on the cadence of destocking and how that unfolded during the third quarter. You know, you mentioned the adjacent categories, and I think you called out pet food as well. But just, you know, based on what you're seeing at this point, I guess related to that, do you think this ends in the fourth quarter, or will there be a residual tail into the first quarter of next year as well? Sure. Good questions, Ghansham. And, you know, look, I, I think we are as frustrated with destocking as, as anybody else is at this point. And, you know, for us, you know, we anticipated it in the third quarter based upon all the conversations we were having with our customers and their new priorities at the end of the second quarter. So, in fairness, we had the year-end details. What actually happened during Q3 is that those programs accelerated and, and the inventory destocking that our customers were working on actually happened earlier in Q3 than we anticipated, and that's what's reflected in our numbers. So, you know, that's one part of the destocking. The second piece of it is, late in the quarter, several of our pet food customers indicated that they would also endeavor on a destocking program for the end of the year. So a little bit of impact late in the quarter, but more of an impact in Q4, as we include pet food now in the destocking conversation. And so I, you know, I think from a broad standpoint, you know, the destocking that happened post-pandemic, we feel pretty confident that we have the timing of that correct, and those products have worked their way through the system. The inventory cleansed itself through the system. We're seeing the recovery of those markets for the most part. These new items that we're talking about in food and beverage and now in pet food, we're anticipating they're going to be done by year-end, Ghansham. But, you know, at this point, I'd just say, you know, we need to continue to work with our customers and understand what their programs are. The last piece of it is, we know for a fact that unit-level inventory across our food and beverage, and certainly our pet food markets, is lower than historic norms. And, you know, a lot of the dialogue with our customers right now is about the absolute dollar value of that inventory, not the unit volume level. So at some point, it does have to stop in order to service the market and consumers, and at this point, we're anticipating that that is at year-end. Got it. And then just my second question as it relates to the 2024 outlook and, you know, your confidence on earnings being up year-over-year. You know, obviously, volumes are a moving target, but you have cost savings. It's a two-year program, it sounds like. Just curious as to, help us with the variances as it relates to how much you think, in terms of cost savings, will flow through in 2024, and any other variances we should keep in mind apart from a lower share count. Sure. And, you know, I think first off, you know, a lot of the dialogue we just had on destocking, you know, will influence the actual guidance that we'll give for 2024 on our next call. As we sit here today, what we have done is we've decided to proactively and aggressively manage the things within our control, and that is part of the $50 million cost reduction program. And really, from a P&L savings standpoint, you should think about, call it 40% of that, to be impacting in 2024. So we'll just round about $20 million of the $50 million cost savings program. So that is, in large part, what is going to drive our earnings growth next year, irrespective of what happens with market recovery and volume. So, you know, that's one input, Ghansham. The other big input is, you know, what's not being talked about a lot right now is our dispensing, especially closure segment, the mix benefit we're getting from our high-value dispensing products, and frankly, the growth that that's generated and has been generating all year long. Those trends will continue next year in 2024, and we anticipate continued growth and mix benefit from the high-value dispensing products, again, irrespective of recovery in food and beverage markets and our, our other aspects of the business. So, so really, we believe we can control what's, what's immediately in front of us. The cost savings program will drive earnings growth for next year, irrespective of, of market recovery. Okay, thanks so much. Sure. We'll now take our next question from George Staphos with Bank of America. Hi, everyone. Good morning. Thanks for the time and the details. You know, Adam, I assume the pets aren't on GLP-1 yet, so that's probably not a reason why you're seeing destocking there. But in terms of the adjacencies that you're seeing destocking in food and beverage, is it—was it soup? What else is going on, and what are your customers saying in terms of why they're doing this? Relatedly, you said they're accelerating their destocking, and that's great, but wouldn't that then mean a pickup in volume in the fourth quarter or soon thereafter? You're just pulling forward the destocking that would have occurred. And related to that, what was the volume in metal for the quarter? And I had a couple follow-ons. Sure. Thanks, George. And, you know, again, half of our volume in the Metal Containers segment roughly is in pet food. So you're right, that- Yep ... that is not part of the GLP-1 conversation at this point, which is- Not yet ... more than meaningful. Right, which is a more than meaningful part of our business. So fundamentally, George, you're right with your destocking thought and question. So it's great that it's accelerated. At some point, that will mean that there is volume recovery to replenish inventory levels. And again, it's not about the unit volume of inventory for our customers at this point. It is about the year-end absolute dollars of inventory that they hold on their balance sheet. So, you know, even though it's accelerated, I don't think it's going to be a favorable upside for Q4 because they are targeting the year-end value. It should be for 2024, but that's not what we're factoring into our ability to drive earnings growth for next year. So I think that's an important component to what we're thinking about for the fourth quarter and for next year. And then, you know, as- Adam, you're saying food and beverage. So where in food and beverage was it, where you had this additional destocking? Sure. So think about our, in the Metal Containers segment, we'll start there. So additional destocking really in our pack volume, a little bit of destocking in soup, but really it's the adjacencies that got included now for the pet food market. So that's the biggest- Okay ... biggest change versus- Got it ... last time we talked. Food and beverage- Sure ... also applies to Dispensing and Specialty Closures as well, particularly in the U.S. market. So it is impacting our traditional kind of hot fill and cold fill closure market in the U.S. business. Okay. And the volume in metal overall for the quarter, what was it? Down about 10%. Okay. Understood. Thanks for going through all of that. I want to go to the cost reduction program. You mentioned its footprint. We can surmise what that means and other cost reduction activities, but can you... And you gave us some delineation in terms of the cadence to Ghansham's question. But what's going to change at Silgan as a result of this? You know, so give us a bit more tiles in the mosaic here in terms of what capability you get, why it doesn't disrupt your service, you know, why it actually makes you a more competitive company going forward, aside from the fact, "Yeah, we'll try to build in $50 million of cost reduction into our models over time." What, what, what does Silgan get out of it? What do your shareholders get out of it? Sure. It's a great question, George, and, you know, I think for starters, what I would say is this is a program at Silgan in cost reduction and rightsizing our capacity that we've executed many, many times over the years at Silgan. So, there should be confidence that we can indeed execute what we're putting in front of you, and we have tremendous confidence that we'll be able to execute it. And then what is the benefit that we get? There's a couple things. One, you know, you think about Dispensing and Specialty Closures. Clearly, we've got growing products, growing markets that we're supporting there. It's really not about taking any capacity out of that market. It is about optimizing the footprint, taking growing volume and putting it in more efficient facilities and driving improvement in that manner. When you move to Metal Containers and Custom Containers, there's a little bit of both of that. There is some capacity that's going to be coming out of those two markets as we rightsize our capacity, and this is an important statement, George, to the volumes that we see right now. So again, we're not necessarily planning on volume growth next year because of markets recovering. We'll have specific products that grow, but this is not predicated on volume recovery from the market. Importantly, what we learned during the pandemic is that we did have this tremendous ability to surge and flex our cost structure to meet incremental demand. So we have tremendous confidence that by rightsizing to the existing capacity required and demand levels of our customers, as markets recover, as volume grows in Metal Containers and in Custom Containers, we'll have the ability to meet that demand head-on with the adjusted footprint and capacity that we have. One last important note to make is we do view pet food separately in Metal Containers because it has been growing for decades in our portfolio. We've invested for growth, our customers have invested for growth, and the good news there is there's really no incremental capacity that we need to add to get this next level or increment of growth in pet food. But we will not be rationalizing any of the pet food assets or capacity as we sit here today and as we go forward, because as you, I believe, heard in the remarks a minute ago, our customers are planning for growth in pet food next year, and they've been very public about making those statements. Okay. I have other questions, but I'll, I'll turn it over to everybody else to be fair, and I'll come back if there's time. Thanks, guys. Okay. Thank you. We'll now take our next question from Anthony Pettinari with Citi. Good morning. I'm wondering if you can talk a little bit more about Custom Containers and any progress on customer wins. Is there anything kind of on tap for 2024 that you can share? I don't know if you're maybe gaining some business back, but maybe destocking is sort of offsetting that, or if you can just talk about how that's progressing versus expectations. Yeah, Anthony, I think you've got it right. I think, you know, we are having success in the market. We are winning in the market as well, and really, it's largely just offset by the destocking activities that are very broad-based in the Custom Container segment. So we do have a couple of large new wins that we'll be commercializing next year now. The first one, which is, from a volume perspective, a significant win for us, will be commercialized, call it mid to late first quarter. And, you know, we feel pretty good about the timing of that one. The second new win has had a couple of delays on it, and we are now looking at a mid-year commercialization of the second item. What's interesting is, again, both are contractual. So you know, the good news for us is our contracts start when the product's commercialized. So we get the same three- or five-year runway on the volume that we've contracted with our customers. So unfortunately, we're ready to commercialize these products, and unfortunately, our customers have not been ready to do so just yet. And again, part of that does fall into destocking, spending the capital to commercialize those products and launch those new products at the end of the year is just not happening now as we had originally thought. So unfortunately, it's two large wins in the next year. Really good line of sight on the first one. The second one is slated for mid-year, and it'll be dependent upon our customer's ability to execute that. Okay, that's, that's very helpful. And then in terms of, you know, the expectation for earnings growth in 2024, just, you know, absent whether a market recovery kind of materializes or not, do you think you can get back to, you know, 2022 kind of EBITDA levels or, or potentially exceed that? I think, you know, that's what consensus is maybe assuming. Or I don't know if there's any kind of finer point you can put on maybe what you view as sort of normalized earnings in maybe a difficult environment. Yeah, I think, honestly, Anthony, we're just a little too early to really provide any additional color there, because that's a—I think that's a pretty specific question that's gonna require more maturity to our 2024 budgetary process. And we're not at the beginning, we're sort of in the middle of it right now, but just not able to provide a whole lot more color than what we already have. Okay. I'll turn it over. Thank you. We'll now take our next question from Gabe Hajde with Wells Fargo Securities. Good morning, guys. So appreciating maybe just, we're coming on the tail here of a couple of guidance cuts and a little bit of disappointing news. Your customers obviously are carrying less inventory for a variety of reasons, one of which is higher carry costs. But I also think for the can industry, for a bit, sometimes customers might deplete inventories in anticipation of lower pricing in the following year for, again, a variety of reasons. So I'm curious, number one, is there anything that you can do kind of preemptively to avoid such discussions? And are there any, you know, larger contracts that kind of come up for maturity next year across your three different businesses, that we should be mindful of and thinking of for the year? Thank you. Maybe I'll take the tail end of that question first. You know, as far as, you know, large contracts coming up in 2024, no, we don't have anything, and either at the beginning, really, or at the end of 2024, just kind of normal course contracts, as we always do, but nothing significant. You raised a good question, Gabe, about, you know, moving procurement activities for customers between years, given price changes. As you very well know, a lot of our businesses is long term - is covered under long-term contracts with very clear pass-through mechanisms associated with them, that may, on the fringe, drive some of that activity. But usually, that occurs when there are significant changes in the raw material component of those pass-throughs. Then we just don't see the significant change in raw materials year-over-year. At this point, as we're heading into 2024, there is likely some deflation, and that'll be a good answer for our customers and for consumers. But I don't know that it's gonna be something that would drive the activity. But, you know, in fairness, the destocking activity has been a challenge to work with our customers as we head towards year-end, and it might just be a benefit that there is a small deflationary item coming their way in the early part of next year. Okay, maybe just a quick follow on that. Sometimes you give us a sense for maybe where tinp late might be shaking out for the following year. I know there was some, I think, settlements on countervailing duties and antidumping duties. So just maybe sense of direction there. And then I'll just ask to get it over with, DSC, the high value solutions that you guys provide has been a bright spot, and you talked about mid-single digit growth. You know, you talked about kind of some of that carrying over into next year. How contingent on a good holiday season is that? Meaning, things are good now for pipeline fill. It gets on the shelf, and maybe people pull back a little bit around the holiday. Is there potential for then, you know, destocking activity in those high-value solutions in the first half of 2024? Okay, great question. So let me start with the tin plate to begin with. And so, you know, it's still in process right now. We're deep in negotiations, and as usual, Gabe, we are fighting like crazy for our customers and for consumers. And, you know, I think the guidance we give now is there will be, you know, a kind of maybe a mid-single digit kind of deflation that we're anticipating for tin plate in 2024. And really, that's gonna probably be a little bit greater in Europe than it's gonna be in the U.S. market. But obviously, most of our—the significant portion of our buy is gonna be U.S.-based in the Metal Containers segment. And then I think you raised a really good question on dispensing and specialty and the higher value items. So as we sit here today, you know, we're seeing a slight shift of customer mix, and we're going to be able to deliver kind of that same mid- to high-single-digit growth rate in 2024, irrespective of the holiday season. We've already seen a little bit of a shift. We've seen some customers that are working on destocking activities already, and we've been able to offset that volume with market opportunities with other customers in other areas of the market. So it's a very balanced portfolio that we have, that's consistently been providing kind of mid- to high-single-digit growth rates for some period of time now. Great. Thank you for the color there. We'll take our next question from Matt Roberts with Raymond James. Hey, good morning, everybody, and thanks for getting me in here. Maybe I'll just ask, last quarter, when you discussed some of those labor issues, I mean, are there any changes there? Have those been resolved, or as you look forward, are there any potential contracts coming up for renewal that maybe haven't been reset for a couple of years? Anything we need to be mindful of there in terms of how that bargaining works? Hey, Matt, welcome to the coverage universe for Silgan. So good to have you. Thank you. Thank you. As far as the labor issues that we talked about at the one food and beverage plant in the U.S. business on the last call, what we, the guidance we had given that, you know, the cost improvement that we would see, we estimated to be about $4 million. So the $10 million cost impact that we had in Q2 would be reduced to $6 million in Q3, and we basically delivered right on that number. We've also gave guidance on the last call that that would reduce to $3 million in Q4, and that's absolutely what we've got embedded to our forecast. It's absolutely what we are executing upon. So good news, we've done exactly what we thought we were going to do and said we were going to do related to that specific labor issue. I'll answer your question two ways on the major contract. So, you know, again, we always have a normal set of customer contracts that come up, nothing significant, as I mentioned earlier. And then from a labor standpoint, our union facilities, nothing significant. I mean, we have our normal course churn that we work through every year or so, on the labor agreements that, you know, we, we've ratified several this year. We'll have a couple to negotiate next year, but that's all very much normal course for us. Okay, perfect. Thanks, Adam. And then maybe lastly, on in terms of your cash and debt, the buybacks in the quarter were certainly encouraging. Is there any update to where you expect the leverage to shake out at year-end or any considerations in 2024 in terms of either paying down debt or more of those shareholder returns? Anything to consider there would be helpful. Thank you both. Sure. Thank you all for taking the questions. Okay, I'll answer the leverage ratio, and I'll pass it on to Bob. From a leverage ratio perspective, for the end of the year, we'll probably be a little bit over 3x. As you know, our stated range is between 2.5x and 3.5x, so we're right in the middle of that and feel like it is not restricting us from any opportunities that we may see. Yeah, on the share repurchases, as you saw, we did buy back, you know, upsized amounts relative to maybe what we've done historically in open market transactions. But I don't think it's any secret that we have maintained and continue to maintain a fairly sizable authorization. Historically, it's been about $300 million over three years. Where we stand today, after buying back roughly $175 million on a year-to-date basis, we've got about $100 million left. So where we've typically been most active in the share repurchase arena is as we start to trend to the lower end of our guidance from a leverage standpoint, at 3.1x, we're kinda right in the middle. That combined with the fact that we saw some market dislocation in the stock performance, it seemed like a good time to be active in the market, particularly relative to the backdrop around the M&A environment, where I think there's just some clunkiness in that market right now, given everything that's going on in the economy and interest rates, that the activity has slowed to maybe a few specific ideas that are being floated. But I think generally, the M&A activity is kind of on a pause, if you will, likely waiting for the calendar to flip. And then I think it's just another example of our kind of disciplined capital allocation program that is intended to create value for our shareholders, and I think clearly that did. Yep. Okay, thank you all again. Our next question will come from Arun Viswanathan with RBC Capital Markets. Great. Thanks for taking my question. So I guess I had a broader question. You know, obviously, the destocking has been, you know, a little bit deeper than, maybe some of us expected. You know, now it's obviously, you know, moved over into the pet food category as well. I guess, what are you hearing from maybe brand owners or retailers, as far as, you know, some of these issues? Would you say that any of those companies are making structural changes, to deal with maybe lower inventories on the retail side and then maybe lower consumption rates on, the brand owner side? I mean, is that anything you're hearing from, any, any of these companies? ... No, it's not. And in fairness to the second point, you know, what we've seen is for our products in particular, that the consumer purchases have been pretty resilient, so their consumption still remains fairly robust for our products. And we don't see, at this point, any structural change to either retail or our customers' branded products, inventory programs or go-to-market programs that are really any different. What we have seen, which is a positive, is more promotional activity. And, you know, we anticipate that to provide a benefit to volume when it's fully integrated into the sales cycle for our customers. Again, I'm just gonna repeat, Arun, that really our customers have been talking about the dollar value of inventory in their system at year-end, and that's what's driving the destocking activity for the most part across our food and beverage and now our pet food segment. I'll talk about two of our largest customers have now publicly stated that they believe 2024 is going to be a year of volume growth, specifically for our products that we provide to them. So, you know, we're anxious to move on to 2024 and get back to a more normalized volume level. But as we said earlier, we're not waiting for that. We are gonna control our own destiny and take good, aggressive action to drive earnings growth for 2024. Okay, thanks for that. And if you were to think again on this volume kind of progression that you saw in 2023, would you be able to parse it out into, you know, maybe what is related to destocking and maybe what's related to primary demand? Just kind of curious how, you know, we've obviously had gyrations through COVID and supply chain issues, but, you know, it does appear that there has been some structural weakness on primary demand related to... And just wondering if that's what it's really gonna take to see some improvement on that side. Well, I think in fairness, Arun, we need to get through the fourth quarter to really understand the full impact of destocking in the year. But I'll go back to a little bit of what we said earlier, that, you know, for our high-value Dispensing and Specialty Closures items, we are seeing significant growth in the products that we define as growth products, and that is driving benefit for the company from a mix standpoint. So really, I think, you know, it is back to food and beverage. I think, you know, we all probably can go right now, based upon the expectations for the fourth quarter, and do some math and get work to figure out what the destocking value was for 2023. But I think we'd rather sit here three months from now in January on our earnings call, and we'll actually talk about what we did experience from a destocking standpoint in 2023. Okay, that's helpful. If I can just ask one more on promotional activity. You noted that there has been an increase there. Could you just elaborate on that? Is it kind of broad-based? We've also been hearing that the depth of promotional activity is not necessarily that strong, meaning that you know, maybe the discounts aren't as deep. What are you seeing on the promotional activity kind of incrementally that gives you a little bit more confidence? Yeah, I think there's a couple things. One, we know the activity's increased from where it was, so let's start with that. And then we also know that the activity level is not what it was pre-pandemic. So, you know, I think there was a report out earlier in the week. It was pretty clear that one of the largest food manufacturers, CPG-wise, had their sales, 21% of their sales were on promotion versus pre-pandemic at 24%. So below pre-pandemic levels, however, up from prior quarters that had a lower than 21% promotion rate. So again, I'm viewing that as progress, and, you know, we think that largely the market is following that kind of progression. I think the other item that you raise is the absolute, you know, price or cost of the product on the store shelf. There's been a lot of inflation that's been passed through to customers, and what we're seeing is, yes, there is increased promotional activity. The promotional value is not the same proposition that was provided to consumers pre-pandemic. And what we're waiting to see now is how effective those promotions are, and that's all happening real time right now in Q4 and I think as we enter 2024. We're encouraged that the percent of product being sold on promotion is going up and approaching kind of pre-pandemic levels, and we think that will be a benefit for consumers and should, as it always has in the past, drive some volume activity across the segment. Yeah, Arun, I think I would take you back to the discussion that we had in the last quarter, and that was that we were getting the sense from our customers that this destocking was all about setting the stage for promotional activity, and we didn't, at that point, exactly know when that was gonna start. So if there's a bright spot in this, I think it's the fact that we are seeing the destocking begin. And whether that's just testing the waters in terms of what the ultimate program is gonna look like, we don't yet know. But the fact that the activity is there is kind of proof of concept, if you will, relative to the destocking activity. Got it. Thanks a lot. We'll take our next question from Mike Roxland with Truist Securities. ... Yeah, thank you, Adam, Bob, Kim, and Alex, for taking my questions. Adam, I just wanted to follow up quickly on a comment you made earlier about how your customers told you about how destocking was going to occur later in 3Q, and ultimately, they pulled that forward, which you were not anticipating. Can you speak to, you know, how you vet your customers' forecast and the comments that they make to you, and whether there's been any change in your approach to that vetting, given the disconnect between what's actually... You know, between what they're telling you and what they're actually doing? Yeah, sure. And maybe just for clarity, Mike, I think as we were talking about the destocking activity on our last earnings call, the information was fresh, hot off the presses. So there's a couple things to think about and just to take that into context. Number one, I think, you know, remember, many of our facilities were either co-located or near located to our customers. We're in their production planning meetings for the most part. So we understand exactly what they're planning to manufacture, and they understand exactly what we're planning to manufacture. So that level of the relationship has remained very strong, very transparent. We've got a really good understanding of what our customers are doing. I think the issue that we had is there were initiatives and objectives that were coming from outside of the location. So think of more from a corporate activity with a year-end free cash flow number at our customers that they were targeting. So I think the disconnect was simply a timing issue, that the corporate information from our customers was working its way down to the production planners. And at the same time, it was very much focused on the year-end metric of free cash flow and what their objectives were. And then the simple reality was, you know, as those plans got embedded into the production schedules of our customers, they were accelerated. So versus what we were originally thinking, because the disconnect for us is we thought it was a year-end target, whereas they accelerated the timing and moved it earlier into Q3. So that's just the reality of what happened. I think we've got a good handle on it now, and I think those programs are vetted through our customers. And, you know, the new item here is pet food, and we're continuing to work through that, as we talked earlier. Got it. Okay. Yeah, the second question, I realize that it might still be a little early, Adam. I know you said you're still working through all the budget details, but can you help us just initially frame the EBITDA trajectory for 2024? You mentioned the $20 million of cost savings you expect next year. You have the $10 million of head closure plan headwinds that they'll repeat. You also have the two new Custom Containers customers you mentioned, which are all positives. But on the opposite end, you still have continued destocking, you have elevated, you know, inflation, especially in Europe, and you have higher resin costs. Can you help us with any... There's any other factors to be mindful of when thinking about the EBITDA trajectory in 2024? Thank you. I think you've got pretty much what we've talked about and what we're thinking about at a high level at this point. So, you know, I think maybe the overarching statement I would make to that, Mike, is nothing has changed as far as our thesis on each of the operating segments as to where we think the kind of near term and longer term growth rates are for each of the segments. And we feel pretty good about that. We've got to get through this destocking, whether it trails into next year in the first quarter, we're not, we don't believe so, but we need to get through it and make sure we understand exactly what it is. But you've got the big moving parts to what we're thinking about 2024. We then need to add, you know, how we're viewing volumes as it relates to our customer programs for next year, that we're still working through those details and will be, frankly, for the balance of the quarter. Understood. Good luck, good luck in 4Q. Thank you. We'll now take our next question from Daniel Rizzo with Jefferies. Good morning. Thank you for taking my question. I was just wondering if you could provide a little more color on, on why there wouldn't be any destocking at all with the high-value customers and, with the high-value products that are now kind of growing. It just seems that just what I've heard from other companies, this is fairly broad-based across kind of the, the whole spectrum. Hey, Dan, and we think it's pretty broad-based across all of our segments as well. I think the items that we're talking about and are high-value dispensing items. You've got to think about kind of what, what percentage of the overall package costs are that we represent to our customers. And really, you know, the consumer that's buying those items really is not subject to a lot of the challenges that we're talking about in other areas of our business. So we do think it's been very resilient. It's grown mid- to high-single-digit every quarter this year, and frankly, it was last year as well. And so we've got good confidence and good line of sight that we do continue to have that growth driver for our Dispensing and Specialty Closures segment in 2024. So, we're talking about, I guess, beauty and fragrance is kind of the main thrust there, is what we're referring to? And if I missed it, I apologize. Yeah, and really it's elements of beauty and fragrance. So, you know, we are in the prestige/luxury end of those markets, again, that I think are subject to some different economic drivers, if you will. Okay. I don't know if I missed this either, but what's the cash cost of the cost savings savings plan? Is it kind of a one-for-one basis, or how should we think about that? ... I think one for one is the right way to think about it. And, you know, where we said the savings would be more over the two-year period, kind of 40% year one, 60% year two, that's gonna be flipped for the cash cost associated. So, you know, we'll have a little bit more cash out the door up front, preparing to drive the cost out of the business. So call it 60/40 on the cash cost. Okay. Thank you very much. Sure. We'll now take our next question from Jeffrey Zekauskas with JP Morgan. Thanks very much. Your SG&A costs were $84 million in the quarter, and in the previous quarter, they were $102 million, and a year ago, they were $97 million. How did you get your SG&A down so much and so quickly? Is that management bonuses, or you're already capturing some of your cost savings? Does this number, you know, contain any of the $50 million in cost savings? Can you explain it? Sure. Thanks, Jeff. So it's a couple of components. One, there's some headcount change there, so we are driving costs out of the business. The $50 million will be incremental to what we've executed on in Q3 and what we will continue to execute upon in Q4. So you've got headcount, you've got the employee-related costs associated with lower headcount as well, and then we've got some other administrative costs that we were able to take action on. So, you know, that includes everything like management bonuses and all the other items associated with kind of accruals for the course of the year. And as you true some of those up, you get a larger impact in Q3 because you're truing up nine months of cost. So that was part of why maybe it does look like a little bit outsized reduction versus either prior year or prior quarters. Okay. And then I have a question about your $340 million in free cash flow. I was wondering if you could check my math, in that through the first nine months, including changes in outstanding checks, your cash flow is negative $660 million. And you've got, you know, call it $230 million in CapEx for the year, that's $890 million. And so in order to generate $340 million in free cash flow, you've got to generate a little bit more than $1.2 billion in the fourth quarter. And last year, I think you generated around $900 million. And, you know, and this quarter, you know, the fourth quarter, you think is gonna be a little bit weak. You've got some other things. So, so is that right? You have to do $1.2 billion to get to that $340 in free cash flow? Yes. What we're looking at is we have higher receivables coming into this quarter, which we are expecting to collect through the end of the year, and some of that will be offset by a slightly higher inventory level through the rationalization programs that we have. What was your accounts payable in the quarter? It's included with other outstanding checks on the balance sheet. Let's see. $652 million. Okay, thank you. Thank you. We'll now take a follow-up from George Staphos with Bank of America. Hi, thanks for taking the follow on. So I just want to come back. So what revenue effect, and if you had it, EBITDA effect, should we bank on... Bank's not the right term, are you considering for the new customers that come in next year? And then I had a couple of follow-ons. George, are you in the Custom Container segment? Yes, correct. That's where you said- Okay. You're commercializing the new customers. Correct. So, you know, look, we were looking to replace the non-renewal of the contract from 2022, and we believe we'll replace the income associated with that on a full year run rate basis. Obviously, we're commercializing one in the first quarter, one mid-year, so the run rate by the end of the year will fully replace that. So call it something around about $10 million of run rate profit by year end. The revenue will not be a one-for-one replacement, just simply because these are gonna be smaller bottles that we're manufacturing. But really it's more the mix benefit we're getting as the profit will be replacing what we decided not to renew. Okay. Thanks for that. And my last two ones, you know, a lot of your customers in food are not on year-end or calendar year ends for their fiscals, but mid-years. So, you know, back to the destocking question one more time, why wouldn't we see them do the same destocking, reduce working capital, drive cash flow higher relative to their end of fiscal year, which means you're still dealing with this through the first half of your calendar and fiscal year for 2024? And then, you know, a question we kind of touched on earlier, I'm guessing there's probably not a heck of a lot to talk about, but your for your human food and beverage customers, what do they think on GLP-1? Thanks, guys, and good luck in the quarter. Great. So I think, you know, George, on the year-end item, so there's a couple things to take into account. You're right, several customers are not on a calendar basis, they're on a fiscal year-end. Many customers are on a calendar basis, so clearly there is a component of that. Really, the other piece of this is retail discussions, and as our customers renew their retail conversations about cost and price change for 2024, there is a January element to that discussion, that the retail discussions are based on a year-end kind of calendar year. So again, we're working through that very closely with them, and we do think that is an impact to the destocking activity. I'm sorry, Adam, so you think it's really year— calendar year-end that has the impact, not the fiscal, which we're just talking about, which could have some effect through middle of the year? Yes, I think it is calendar year-end. Again- Got it. Some aren't on a calendar year-end, some are, and these, these retail discussions are on a year-end basis. And then, your other part of the question, George, I apologize. Yeah, no worries. Just, you know, to the extent that you have any commentary from your customers on anti-obesity drugs and the effect it's having on human food and beverage, what are you hearing? You know, what should we consider? What should we not worry about? Any thoughts there would be great. Thanks, and good luck in the quarter. Sure. Thank you. You know, we've had several discussions with our customers and, you know, I think for the most part, you know, the non-pet food segment of our business for the earlier conversation, I think the discussion has largely been around what we do is our products provide nutrition to consumers at a tremendous value, and it's a safe means of getting low-cost, high-value nutrition products to consumers. And so we do think that the consumers of our products likely won't be candidates for this kind of weight loss application. And we also think that even though some may be, that this is high nutrition product that we support. So, you know, snacks are not a big part of what we do. You know, we've got some of our beverage products that probably are closer, but we just don't think, according to our customers, that there's any material impact for the foreseeable future from the advent of the GLP-type applications. Thank you, Adam. Sure. That appears there are none for the telephone questions. I'd like to turn the conference back over to our presenters for any additional or closing comments. Great. Thank you, Anna, and appreciate everyone's time today and interest in the company. Look forward to reviewing our year-end and our 2024 outlook in January. Once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.