Good day, and welcome to the Silgan Holdings Fourth 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 and CFO. Before we begin the call today, we'd like to make it clear that certain statements made on this call may be forward-looking statements. These forward-looking statements are 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 as substitutes for similar GAAP metrics can be found in today's press release and under non-GAAP financial information 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 Fourth Quarter and Full Year 2023 Earnings Call. Our team delivered another year of strong performance in 2023 amid an unprecedented and rapidly changing market backdrop, proving once again that our businesses and our company are resilient regardless of the broader economic circumstances. We delivered our second highest adjusted EPS and adjusted EBIT in the history of the company and our robust free cash flow and strong balance sheet allowed us to return over $250 million to our shareholders through buybacks and dividends. Our disciplined approach to everything we do, including our customer partnerships, our contractual arrangements and our capital deployment has positioned the company to continue to perform for years to come. During the year, we embarked upon a multiyear $50 million cost improvement program, which is the largest in our company's history to strengthen our already market-leading cost positions across each of our businesses. To achieve these savings, we made several difficult decisions beginning in late 2023 and have announced the consolidation of five of our manufacturing facilities to date. These actions will position the company to continue to meet the unique needs of our customers and compete and win in the markets we serve with an even lower cost operating footprint. Volume trends in 2023 were mixed among the end markets we serve and the products we produce. Our strategic growth products for dispensing and pet food continue to see success and performance to outpace broader market trends, and products that had experienced post-pandemic destocking in 2022 delivered strong recovery and growth in 2023. While consumer demand for our essential food and beverage products remains resilient, midway through the year, it became apparent that our volumes would be adversely impacted across the segments by our customers' decisions to focus on destocking initiatives in the food, beverage, and pet food markets as a result of the impact of inflation throughout the supply chain. At the segment level, our Dispensing and Specialty Closures segment delivered another year of strong organic growth and new business wins for our high-value dispensing products, particularly in the high-end fragrance market. This growth drove margin improvement and a more favorable mix that partially offset the impact of lower volumes in food and beverage products from customer destocking. We successfully recovered our costs in the marketplace and mitigated the impact of a unique situation at one of our U.S. operating facilities that presented discrete labor challenges and drove incremental costs in the operating system during the year. In Metal Containers, we reported our sixth consecutive year of record adjusted EBIT. Our long-term contractual arrangements and disciplined pass-through mechanisms helped our business to offset lower volumes and the impact of our own inventory management program in the prior year to grow adjusted earnings. In Custom Containers, our volumes fell short of the prior year due to continued customer destocking, primarily in the second half of the year and the delay of commercializing new business wins into 2024. As we now turn our focus to 2024, we believe the business is positioned to deliver volume growth and with the benefit of our cost-savings initiatives beginning to impact profitability, we expect to meet or exceed our prior record for adjusted EBITDA. We have seen early signs of recovery in certain end markets for the customer destocking activities that we experienced in 2023 and expect these favorable trends to continue to improve through the first half of 2024. We are expecting Dispensing and Specialty Closures volumes to grow by a mid-single-digit rate driven by another year of high single-digit growth in our dispensing products and low single-digit growth in our closures products, resulting in an improved mix for the segment. Metal Containers volumes are expected to grow by a low single-digit percentage driven primarily by mid-single-digit growth in pet food. Custom Container volumes are expected to be comparable to prior year levels with more pronounced destocking in the first quarter, offset by growth driven by new business wins in the subsequent quarters of the year. As we enter 2024, we continue to make progress and execute our strategic priorities. We have taken strong actions to effectively manage the factors within our control and believe the company is positioned for earnings and free cash flow growth in 2024 and beyond. Our customer partnerships remain strong. We continue to compete and win in the markets we serve. Our strategic growth initiatives continue to shape the company's future, and our disciplined capital deployment model continues to create significant value for shareholders. With that, I'll turn it to Kim, who will take you through the financials for the quarter and our estimates for the first quarter and full year of 2024.

Thank you, Adam. As Adam highlighted, our business continued to deliver strong financial results despite several headwinds in 2023 as we achieved our second highest adjusted EPS in the history of the company and once again showed that our business performs well despite challenging economic circumstances. We continue to convert our profits into strong cash generation in 2023 and used our cash to return over $250 million to shareholders including $175 million through share repurchases. We used our remaining cash to delever to near the midpoint of our target leverage range, and our balance sheet remains strong as we enter 2024. Turning to the fourth quarter 2023 results. Net sales of approximately $1.3 billion declined 8% from the prior year period, driven primarily by lower volumes in each of our segments. Total adjusted EBIT for the quarter of $135.9 million decreased by 9% on a year-over-year basis, with record adjusted EBIT in Dispensing and Specialty Closures and higher adjusted EBIT in Custom Containers, offset by expected lower adjusted EBIT in the Metal Container segment. Adjusted net income per diluted share declined $0.22 from the record achieved in the fourth quarter of 2022, with lower volumes and higher interest expense of $0.06 driving the year-over-year decline. Turning to our segment sales. Sales in our Dispensing and Specialty Closures segment declined 3% versus the prior year, primarily as a result of lower volume mix of 5%. The decline in volume was driven primarily by customer destocking activities in domestic food and beverage markets and double-digit declines for higher-volume meadow closures for international food and beverage markets. Record fourth quarter 2023 Dispensing and Specialty Closures adjusted EBIT increased $12.4 million versus the record achieved in the prior year period as a result of strong cost recovery and lower manufacturing costs, which were partially offset by the impact of lower volume. In our Metal Container segment, sales declined 10% versus the prior year, excluding a 2% impact from Russia sales in 2022. Lower volume in several product categories drove a 7% decrease as customer destocking priorities continued to weigh on order patterns throughout the quarter, but showed improved trends relative to the year-over-year declines in the third quarter of 2023. Price mix was negative 4% in the quarter, which was partially offset by a 1% improvement in foreign currency translation. As expected, Metal Containers adjusted EBIT was below the record level in the prior year quarter primarily due to the prior year benefit of inventory management, which did not repeat in 2023, and lower volumes as a result of customer destocking. In Custom Containers, sales declined 5% compared to the prior year quarter, driven by a 2% decline in volumes, the pass-through of lower resin costs, and a less favorable mix of products sold. Custom Containers adjusted EBIT increased $1.8 million as compared to the fourth quarter of 2022, primarily due to improved cost management, which more than offset the impact of lower volume. Looking ahead to 2024, we are estimating adjusted net income per diluted share in the range of $3.55 to $3.75, a 7% increase at the midpoint of the range as compared to $3.40 in 2023. This estimate includes corporate expense of approximately $25 million, interest expense of approximately $170 million, a tax rate of 24% to 25%, and a weighted average share count of approximately 107 million shares. Depreciation is expected to increase $15 million to $20 million on a year-over-year basis and be in the range of $225 million to $230 million. At the midpoint of our 2024 adjusted EPS range, we expect to meet or exceed the record levels of adjusted EBITDA achieved in 2022. From a segment perspective, a mid-single-digit percentage total adjusted EBIT growth in 2024 is expected to be driven primarily by the Dispensing and Specialty Closures segment with slightly higher adjusted EBIT in the Metal Containers and Custom Container segments relative to 2023 levels due to the impact of anticipated customer destocking in the first half of 2024. Based on our current earnings outlook for 2024, we are providing an estimate of free cash flow of approximately $375 million, a 5% increase from 2023 as earnings growth in 2024 will be partly offset by higher CapEx, which we expect to be approximately $240 million and by approximately $30 million of cash cost to support our cost reduction program, including additional working capital to facilitate the program. Turning to our outlook for the first quarter of 2024, we are providing an estimate of adjusted earnings in the range of $0.60 to $0.70 per diluted share as compared to adjusted net income per diluted share of $0.78 in the prior year period. The year-over-year decline in adjusted earnings in the first quarter is driven primarily by lower volumes, the impact of the sell-through of higher cost inventory from the prior year in our European metals operations, and higher interest expense. First quarter 2024 adjusted EBIT is expected to be above prior year levels in Dispensing and Specialty Closures, with a low single-digit decline in volumes driven by customer destocking more than offset by improved profitability and stronger mix. First quarter 2024 Metal Containers adjusted EBIT is expected to be slightly higher on a sequential basis from the fourth quarter of 2023 but down approximately $10 million year-over-year due to a low single-digit percentage decrease in volumes as a result of continued destocking and the sell-through of higher cost inventory from the prior year due to a double-digit percentage decline in steel cost in Europe in 2024. Adjusted EBIT in the Custom Container segment is expected to be stable on a sequential basis but below prior year levels due to continued destocking trends as sequential volumes remain stable but year-over-year comparisons become more difficult in the first quarter. Volumes in the Custom Container segment are expected to improve throughout the year as new business wins ramp up and destocking is expected to abate. That concludes our prepared comments, and we'll open up the call for questions. Anna, would you kindly provide the directions for the question-and-answer session.

And we'll take our first question from George Staphos with Bank of America.

Congratulations on the progress made this year. My first question is about destocking. You mentioned that you expect it to continue through the first half of the year, and it has been ongoing for quite some time. How should we understand its variation across different segments? What gives you confidence that we are nearing the end of this prolonged period of destocking? Additionally, regarding volume, what trends are you observing in the soup for metal segment? We've heard there may be some improvement there, and any insights you could share would be appreciated. I have one more follow-up question.

So, regarding destocking, we discussed this a bit during our last call, but let's categorize it. The products that saw a significant increase during the COVID pandemic have created a destocking situation as we moved past it. This includes categories like lawn and garden items, some hard surface cleaners, health products, and sanitizers. These products experienced a destocking phase after the pandemic, but they have now fully recovered as we come to the end of 2023. Early signs of recovery include our trigger sprayers, which sustained double-digit growth later in 2023, and we expect that growth to continue into 2024 as well. Following this, we faced some food and beverage destocking challenges, particularly in Europe due to inflation, which affected other categories as we emerged from the pandemic. However, we are now seeing those challenges diminish, with only minor issues expected to carry into 2024. The last destocking issue to highlight is related to pet food, which we mentioned during the last call. This trend appeared later in the cycle, and the fourth quarter unfolded as we anticipated for pet food. For 2024, we expect continued destocking in this category, but overall trends are improving. We're confident that pet food will see decent growth throughout 2024. We anticipate that destocking in pet food will conclude somewhere between the end of the first quarter and the second quarter, meaning by the first half of the year, we should be past it. So, to summarize, we see it diminishing in Q1, with the ongoing pet food situation, and we believe that as we move beyond the second quarter, we will have completed our destocking activities.

And so the related question I had was just what are you seeing in soup. And then my follow-on, and I'll turn it over. So as we think about 2024, and the discrete items, the things that are relatively in your control, however you want to define it in terms of earnings gains you have, the cost out program, you have some new wins. What should we bake in for this year, not that it's ever easy, relative to 2023. And I'll turn it over there.

We appreciate your question about soup. I apologize for missing that earlier. In our last call, we mentioned that we were not only expecting but also observing increased promotional activities in our food markets, especially in soup. Soup performed well in the fourth quarter, with CMI data indicating a strong recovery and growth. From our viewpoint, soup’s performance unfolded exactly as we anticipated throughout the year. We expected a more typical soup-filling season compared to what was observed in 2022, and that’s indeed what transpired. The year-on-year comparisons were challenging during the summer months when soup is usually less filled. However, as we’ve progressed into the fourth quarter, we are now experiencing a normal soup season. Additionally, the positive impact of our customers’ promotional efforts appears to be resonating with consumers. This gives us confidence for 2024. Our customers are taking steps to refocus on providing value to consumers and possibly driving volume, and we’re noticing some encouraging signs. Regarding how to consider all these factors, they are reflected in our guidance for 2024. We did have one plant in the U.S. Dispensing and Specialty Closure segment, which has fully recovered, and the costs have been reduced as we moved through the year, making progress each quarter. Those costs have now been eliminated from our system as we look to 2024. Concerning new developments in the Custom Container business, we discussed our first project launching in the first quarter, and it’s on schedule for commercialization. We are in the final stages of qualification for this, and a second significant project is expected to go through qualification and commercialization around midyear. We’re optimistic that these developments are on track. Lastly, our $50 million two-year savings program will start delivering savings in 2024, with about 40% of the total expected savings materializing. We believe we will achieve an annual run rate of approximately $20 million in savings by the end of 2024 as we move into 2025.

We'll now take our next question from Matt Roberts with Raymond James.

Adam, could you please elaborate on George's earlier question about pet food? I believe you mentioned that for 2024, you're anticipating a mid-single-digit growth rate. Please correct me if I'm mistaken, but it seems that this growth could be impacted in the first half of the year, possibly into Q2, due to destocking. Could you also provide some insights on the inventory levels as we finish up 2023? What indicators do we have that additional supply might be coming online? I'm trying to understand how we can achieve that mid-single-digit growth after the destocking in the first half.

Sure. And you're right. So there is some continued destocking in the first quarter. I think we're being a little cautious, Matt, because as we've seen in other categories, that destocking does sort of linger on just a little bit longer. So we're working closely with our customers. And as you well know, we're near site or on site with many of those customers in this category. So we've got really good visibility into what they're filling plans are for 2024. They've added some additional capacity as well. So that's helpful. So as we think about it for the year, you've got some destocking activity that will cause a difficult comp for us in the first quarter, and we will see growth the remainder of the year in pet food. And on a full-year basis, again, remember, our first quarter and fourth quarter are two seasonally smallest quarters in the Metal Containers business. So we anticipate nice growth for the full year as we sit here in wet pet food.

And then on high-value dispensing, and I might have missed this in the prepared remarks as well. But I believe in the release, you said further growth in 2024. How does that compare to the growth rates you saw in that category in 2023? And what factors are driving that for either higher or lower than 2023? Is it new products and new customers? Or just any additional color on that high value would be great there.

Sure. It's a highlight for us. It's an area where we've been winning in that market for sure. We've seen really nice growth. And I would say we're still expecting significant growth in that particular sector. It's just moderating just a little bit. So instead of very consistent kind of mid-double-digit levels, we'll be kind of low double digits, high single digits as we look forward into those products. And that still gets the volume. So I think we're going to be ahead of the market for whatever that's worth. And again, we've added capacity as well to support that continued growth. So that growth comes with new product launches. It comes with innovation. It comes with growing customer relationships. So we're having a lot of success in that market because we are doing what Silgan does. We are standing and delivering on our commitments and winning with innovation in that market.

We'll now take a question from Gabe Hadje with Wells Fargo.

I had a question about the guidance and positioning for the business into 2024. As we discuss this, you mentioned closing five facilities as part of the $50 million cost reduction initiatives. I understand this is a delicate topic, but are there additional plant consolidation efforts you need to pursue? What are the main risks associated with achieving that $20 million run rate number? Or do you feel confident that you will reach that target, with potential for more growth beyond that?

Sure. And they are tough decisions, Gabe. And what I would say is the five that we've announced to date go a long way to supporting the $50 million in total. Unfortunately, it doesn't get us all the way there. So there will be some additional activity, call it, over the course of the next 12 months that we'll be engaging in. Those are fluid plans, and we're continuing to evaluate. From my perspective, Gabe, this is nothing new for Silgan, unfortunately. We've had such a focus on driving cost out of our operations over time that this is just kind of the next page in the playbook. And we're responding, as we said, we're going to right-size our capacities to market demand, and we've done that. We're doing that. And we're continuing to evaluate where additional opportunities to drive cost out of the system can take place. So you should assume that there will be some more activity in the course of 2024 to get us to the total $50 million by the end of 2025.

Maybe Bob, one for you. It seems like some of the top webs are getting cleared out of the M&A markets, we've seen a couple of things were at a loose here. That's been a pretty big value driver for Silgan historically speaking. Again, to the extent you can comment, I know you guys are always trying to be busy there, but anything that you get excited about or that we can be talking about maybe in '24 and/or uses of cash if that doesn't come into fruition, balance sheet closer to three times leverage, do you see the stock as attractive at current levels?

Yes, I believe you've identified the strategic priority. It remains unchanged, honestly. We are staying active even when the market is quiet, focusing on building relationships and understanding potential market opportunities and their timing. We share your view that the situation is beginning to clarify, with expectations that some properties might come to market in 2024. Current conditions in the credit markets likely enable this. We feel that we have a strong advantage in those opportunities. While nothing guarantees a deal, we are eager to return to the activities we consider a strategic priority, which is how we plan to grow the business. If no opportunities arise, we will explore other options to ensure positive returns for our shareholders, such as reducing debt to maintain our capacity or continuing share repurchases. We will evaluate where we believe the best return for our shareholders lies.

Okay. One quick follow-up. Do you feel like maybe just from conversations that seller expectations have been adjusted or starting to adjust in the right direction to accommodate or compensate for the rising cost of capital?

Yes. I don't know if you ever get entirely reconciled from a buyer and a seller perspective. But I do think, given that a lot of the friction that's happened around some of the deals in the market more recently, I think there's a realization that maybe peak levels are going gone anyway. So I think there's negotiations to be had, and that's typically where we do well.

We'll take our next question from Ghansham Panjabi with Baird.

Adam, reflecting on some earlier comments, it is still early in the fourth quarter earnings season, but there appears to be a noticeable shift in tone among your customers and retailers regarding promotional spending and product innovation to drive volume. This is evident in the human food sector. How is this trend playing out in the pet food segment, which has grown significantly for you compared to previous years? I'm interested in any insights you can share about customer conversations beyond the usual observations of increased destocking in that area.

Sure. And I think you're spot on, Ghansham, with the broader food market and that promotional activity and maybe just to add a comment to what you said. I think the price recovery was really the focus for our customers, certainly in 2023. And I think that conversation has shifted now more to a volume recovery in 2024. And you're seeing the, again, the promotional activity, advertising, etc. in support of that. And what I would tell you about the pet food market is I think there's a small lag to the pet food market, following some of those similar patterns as they think about promotional activity. They were a little later to pass through the price to consumers as we were working through inflationary items. And I think they'll just be a little later to look to recover the volume with promotional activity, etc. So I think that's all factored into our guidance. We're having those conversations with our customers. And there are promotional activity plans for 2024. They're just starting a little bit later than what we've seen in other categories.

And then on Dispensing Closures, I apologize if I missed this, but the higher margin categories such as fragrances, etc., you're starting to cycle through some more difficult comparisons and so on and so forth, just given the extraordinary growth in those segments. How do you see those evolving in 2024?

Well, look, I mean, we're competing and winning that space all day long. So we've invested fairly heavily to support the growth as well. So we have a really good degree of confidence that those new business wins that we probably haven't talked as much about in Dispensing and Specialty Closures will deliver the growth that we're seeing in that space. So we have done a very nice job not only getting the new wins but putting the capacity and commercializing that capacity to support the growth.

We'll take our next question from Anthony Pettinari with Citi.

The EPS guidance seems to point to kind of stronger year-over-year growth as the year progresses. And I was just wondering if there's any detail on how the $20 million in cost saves could ramp throughout the year? And if there's any other kind of cost items, resin or freight or in terms of recovery, how those assumptions could kind of impact the trajectory or cadence of year-over-year growth as we go through the four quarters of the year.

Yes, that's a good question, Anthony. There are two key points regarding the timing and implementation of the savings from the $50 million program. We expect to achieve $20 million in savings by the end of 2024. It's important to note that we just announced this in the last earnings call, so the initiatives will roll out over the year. Consequently, you'll see greater savings in the second half than in the first half. We are confident in our ability to deliver these results, as driving down costs is part of what we do at Silgan. Additionally, we should consider our European operations. As Kim mentioned earlier, we are facing the challenge of high-cost inventory in our European metals business, affecting both Dispensing and Specialty Closures and Metal Containers. This will have a negative impact primarily in the first quarter, totaling around $10 million on our profit and loss statement due to the higher cost inventory. There may be some residual effects into early Q2, but the main impact will be in the first quarter.

Can you provide insights on the underlying demand in Europe and what you anticipate for your European operations this year? Most of this is in Dispensing and Closures, and it seems you have a mix of discretionary and staple products. How do you evaluate the European consumer's resilience compared to North America?

Yes. So maybe it's a tale of two cities as far as we think about the businesses that we have. So maybe I'll start with the European consumer. Again, as we've talked previously, we think it's been a tough environment for the European consumer between inflation in food products, inflation in fuel and light and power. There's a lot of inflation the consumer's taken on, and they have adjusted their spending habits. So we've seen that in more discretionary items. Frankly, we've seen it in our Metal Closures business, particularly in Europe, where we are on more of a premium package with a glass package with a metal closure on the top of it. So for the food and beverage business, I think we're seeing soft demand. We saw a soft demand for the most part in 2023. That continues for the most part. We think there should be some improvement in the second half. We've taken a conservative approach to that at this point. And then you think about the balance of our dispensing products, actually, demand has remained quite resilient in the European economy for those products. And again, we've got some healthcare business. We've got some fragrance. Our high-value dispensers continue to do well, almost regardless of the geography and where we compete.

We'll take our next question from Mike Roxland with Truist Securities.

Congratulations on finishing the year strongly. My first question is about your comment on Dispensing Specialty Closures and the slight moderation in the growth rate at the higher end, now growing in the low double digits or perhaps high single digits instead of mid-double digits. What has changed from your perspective that has led to this lower growth rate compared to before?

Fundamentally, nothing has changed. Again, we see a lot of the same type of opportunities for continued growth going forward. The base has obviously grown quite a bit. So the absolute dollar value of growth that we're talking about year-over-year, you're just climbing over a larger base every time you keep growing by a nice double-digit kind of growth rate. So nothing really beyond that, Mike. It's a strong market for us in the high-value dispensers, and we're going to continue to see really nice growth.

So just the basis of larger, so it's affecting the year-over-year changes on a go-forward basis. But there's no shift in terms of demand?

That's the right way to think about it from our perspective.

Got it. Okay. And then just quickly on the cadence of dispensing, especially closures volumes in 2024. If I heard you guys correctly, you're expecting volumes to be up mid-single digits in 2024. You still are calling out persistent weakness in domestic food and beverage and Metal Closures in Europe. That's like it's played you for a bit now. So I mean, is it fair to say that volumes will be weaker in Q1, slowly getting better in Q2 and then could be up more prominently in the back half of the year?

Yes. I think you've got the cadence exactly right. And again, the destocking as it relates to Dispensing and Specialty Closures really is the ending of the food and beverage destocking activities that we've been talking about. So we anticipate that to be mostly a first-quarter item, and we should see that inflection point, call it, late in Q2.

Got it. If I could sneak in one more, just real quick. You mentioned that promotional activity is starting to improve and that pet food will see some delays. What categories or markets are you currently observing increased promotional activity?

Yes, it's an interesting question because we see it across almost all of our categories. We've been having many discussions with our customers about their promotional activities, and the feedback indicates that consumers are increasingly inclined to buy products on promotion. If we look at all our categories, we certainly observe this trend in food, beverages, home care, and lawn care ahead of the lawn and garden season. This phenomenon is evident in various segments, although the impact may vary. However, I would exclude high-end fragrant beauty from this trend since promotional activity isn't typically necessary there; it caters to a different consumer demographic with a distinct value proposition.

Our next question will come from Daniel Rizzo.

Given the customer wins you had and what you're seeing right now, can you hit the high end of your guidance for 2024 without restocking? Or does that assume a little bit of a restock cycle maybe in the back half of the year?

Yes, good question. Obviously, as we think about the guidance that we give, it does factor in a range of outcomes. So for the most part, we don't need a full recovery of the markets to get to the high end of our range, but it would take some volume growth in each of our segments to get there.

I guess just to converse of that, to hit the bottom end, that assumes that things just don't get better or that there's some sort of demand decline or something or just a correction?

Yes. I think again, we're anticipating some nice recovery and growth in certain categories for 2024. So if that does not happen and there are some other geopolitical items that would force demand to retract a bit, that's how you get to the lower end of our guidance.

You mentioned many new contract wins, some occurring in the middle of the year. I was curious if there are historically timing issues where customers delay commercialization or if things get postponed. Or is it generally the case that what you see is what actually happens?

Yes, I do. What I would say, Dan, is that the large contract commercializing in the first quarter was originally identified to commercialize in 2023. And while that's disappointing, what's one of the great things about Silgan's disciplined approach to these customer arrangements is the contract doesn't start until it's commercialized. So while it's, let's call it, six months later than we anticipated, we do get the full term of the agreement that we had negotiated and agreed upon with the customer. The second item that's commercializing midyear was also supposed to be a '23 item. So unfortunately, they both got delayed. But the good news, as I said, the one in the first quarter, we are fully qualified and are commercializing literally as we speak. So we are right on track with commercializing both of those new business wins as we sit here today.

It seems there are no further telephone questions. I would like to turn the conference back over to our presenters for any additional or closing comments.

Great. Thank you, Anna. Thanks, everyone, for your interest in Silgan and we look forward to reviewing our first quarter results after the first quarter.

And once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.