Please stand by, your conference is about to begin. Good day and welcome to the Silgun Holdings fourth quarter 2025 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Alex Hutter, Senior Vice President, Strategy and Investor Relations.

Please go ahead. EVP and CFO, and Bob Lewis, EVP Corporate Development and Administration. Before we begin the call today, we would like to make it clear that certain statements made 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 2024 and other filings for the security. 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 EBITDA, free cash flow, and adjusted net income for diluted year. A reconciliation of these similar GAAP metrics can be found in today's press release and under the non-GAAP financial information portion of the Investor Relations section of our website at silkenholdings.com. With that, let me turn it over to Adam.

Thank you, Alex, and we'd like to welcome everyone to Silgin's fourth quarter earnings call. Before we begin our discussion on our fourth quarter and full year results and our outlook for 2026, I want to welcome Sean Fabry, who was promoted to CFO in November, to the call. Sean joined the company through the IPEC closures acquisition in 2010 and has served in senior finance roles in each of our operating segments and most recently on our corporate development team. Sean brings a wealth of knowledge and experience to his new role that I know will make him and our company successful well into the future. Sean's looking forward to meeting our analysts and investors in the coming quarters, so please join me in welcoming Sean to the call. I also would like to take a moment to thank Bob Lewis, who informed the company of his decision to retire at the end of March, for his over 21 years of steadfast commitment to our company. Since Bob joined the company in 2004, our sales have nearly tripled and our stock price has appreciated over seven times, representing a 10% compound annual growth rate. And Bob's leadership in our finance and corporate development efforts have contributed meaningfully to our growth and value creation. He's been a trusted and valued partner to me, our executive team, and to our advisors, and we wish Bob all the same success as he enters his retirement. Moving now to our results. Our team continued to show exceptional focus and determination in 2025 as our business navigated evolving consumer spending trends throughout the year. They created a more challenging operating environment for our customers and our company. We delivered our second highest adjusted earnings and free cash flow in the history of the company, returned approximately $160 million in capital to our shareholders, and returned within our target leverage range just over a year after closing the Vayner acquisition. We made significant progress towards our strategic goals in 2025 as we successfully integrated the Vayner acquisition, continued to outpace the market and our peers in target organic growth products and end markets, and completed our multi-year cost savings program as expected. We continue to validate the success of our unique operating model in our customer partnerships and are being rewarded in the market with new business opportunities and awards as a result of our unmatched focus, operational excellence, market-leading innovation, and relentless efforts to provide the best total value solution, which now represents over half of our adjusted EBITDA, delivered another year of record sales, adjusted EBITDA, and adjusted EBITDA, with continued EBITDA margin expansion and significant free cash flow generation. With the Vayner acquisition now fully integrated and our run rate synergies fully organic growth well in excess of our peers as we continue to win an outsized proportion of new product launches in the market. The combined innovation engine of these two market leading businesses has already yielded additional contractual business wins in the business pipeline and Dispensing 25 included some unforeseen challenges. Our team adapted during the year to the changing landscape. Metal containers business delivered another year of positive earnings and volume trends with 4% growth in volumes, led by 7% growth in pet food products. While our business was faced with a very challenging circumstance as one of our long-term customers during the year, our teams were focused on protecting our business ahead of this outcome and work diligently to nearly fully offset the secondary impact of this customer exiting certain markets. More importantly, with the recently announced developments with this customer, we believe we are uniquely positioned to continue to supply this business in the future and at this time do not anticipate any further impact from this situation. In custom containers, our teams continue to build on our commercial success, and despite significant de-stocking in personal and home care products in the fourth quarter, delivered a record year of profitability driven by our cost reduction programs and continued commercial successes. Our adjusted EBIT and EBITDA margins expanded by 150 basis points to a level well above the target we laid out about a decade ago, and the business is now in a strong position to transition into an accelerated growth phase over the next several years. Our team continues to demonstrate and validate our unique position in this market, And despite being of smaller scale than some of our competitors, the levels of service we provide, new product innovation, and the value of our long-term customer partnerships create significant opportunity to deliver organic growth in this business. As we turn our focus to 2026, we continue to see significant opportunities to grow our company both organically and inorganically. Our teams remain focused. Our strategic initiatives continue to bear fruit. Our balance sheet is within our target leverage range, and we believe the opportunities for significant value creation for shareholders in 2026 and beyond remain as compelling as at any time in our history. At the segment level, we are expecting dispensing and specialty closures organic volumes to grow by a low to mid-single-digit rate in 2026, driven by another year of growth in our dispensing products, and we expect metal containers volumes to grow by a low single-digit percentage, driven primarily by another year of mid-single-digit growth in pet foods. In custom containers, after a record year of profitability, volumes are expected to be flat, as the first quarter is expected to see some continued but limited impact from customer de-stocking. Importantly, we anticipate this impact to be offset in the remaining three quarters as the business repositions to longer-term growth with key franchise customers. Enter 2026, we remain excited about the opportunities that lay ahead for the company and are confident that the structural changes and evolution in our portfolio have positioned us to drive growth in our business in the near and long term. Our teams remain focused on meeting the unique needs of our customers as we continue to compete and win in the markets we serve, and our strategic growth initiatives continue to shape the company's future. The power of our portfolio, the strength of our teams, and the discipline of our capital deployment model continue to drive significant opportunity to create value for shareholders in 2026 and beyond. With that, Sean will take you through the financials for the quarter and our estimates for the first quarter and full year of 2026.

Another year of strong, driven by the continued success of our long-term strategic initiatives, the discipline of our capital deployment model, and the resilience and growth of our products and end markets. During the year, we successfully integrated the Vayner transaction and achieved full run rate synergies, returned our balance sheet leverage to within our target range in just over a year following the closing of the transaction, and completed our multi-year cost reduction program. Turning to the fourth quarter 2025 results, net sales of approximately $1.5 billion increased 4% from the prior year period, driven primarily by the contractual pass-through of higher raw materials, mostly in our metal containers business and favorable foreign currency translation. Total adjusted EBIT for the quarter of $150.6 million was relatively flat from the prior year, with higher adjusted EBIT in our metal containers segment offset primarily by higher corporate expense. Adjusted EPS of $0.67 decreased by $0.18 from the prior year period due to higher interest expense and a higher tax rate in the fourth quarter. The fourth quarter tax rate was negatively impacted by certain non-recurring, non-cash tax items, which impacted the tax rate in the quarter by approximately 3% and the year by approximately 0.5%. Turning to our segments, fourth quarter sales in our dispensing and specialty closures segment increased 1% versus the prior year, primarily as a result of foreign currency translation of 4%. Higher volumes for high-value fragrance and beauty products were offset by the anticipated destocking impact for products in the personal and home care markets. Order 2025 dispensing and specialty closures adjusted EBIT was comparable to the record level in the prior year. As expected, the contribution of double-digit growth in high-value fragrance and beauty products and favorable foreign currency translation were largely offset by the anticipated impact of lower volumes of products for personal care and home care markets. and related under-absorbed costs for production and inventory reductions in the quarter. Relative to our expectations entering the quarter, both sales and adjusted EBIT and dispensing of specialty closures were largely in line. In our metal container segment, sales increased 11% versus a prior year quarter as a result of the contractual pass-through of higher raw material costs, principally for steel and aluminum, and higher volumes of 4%. Our volume growth in the quarter was largely a result of higher volumes for pet food markets of 7% as we continue to experience strong volume growth in this category. Additionally, we did see a limited amount of pre-buy volume in the fourth quarter as certain customers pulled forward volume ahead of the anticipated raw material inflation in 2026, approximately 5% versus the prior year quarter, as the segment benefited from both strong operational cost management, which was responsible for the majority of the outperformance in the segment versus our expectation entering the quarter, and a limited impact from pre-buy volumes ahead of additional raw material inflation in 2026. We estimate the impact of pre-buy volumes to 2025 adjusted EBIT was approximately $2 million. Lesson containers, our results were largely consistent with our expectations as sales decreased 8% compared to prior year quarter due to lower margin business exited as a result of a planned footprint optimization. these volumes, our volume increased 1% versus the prior year quarter. Custom containers adjusted even was comparable to the prior year levels. Looking ahead to 2026, we are estimating EPS in the range of $3.70 to $3.90 as compared to $3.72 in 2025. Partially offset by this estimate includes interest expense of approximately $205 million, a tax rate of approximately 25 to 26%, corporate expense of approximately $45 million, and a weighted average share count of approximately $106 million shares. Interest expense is expected to be above 2025 levels due primarily to the maturity of our 1.4% senior secured notes that come due in April. At the midpoint of our 2025 adjusted EPS range, we will exceed the prior levels of adjusted EBIT and adjusted EBITDA achieved in 2025. With respect to low-to-mid single-digit percentage total adjusted EBIT growth in 2026 is expected to be driven primarily by a low to mid single-digit percent increase in dispensing and specialty closures adjusted EBIT and a low single-digit percent increase in metal containers adjusted EBIT. Custom container segment adjusted EBIT is expected to be comparable to 2025 levels as the business completes its multi-year cost reduction initiative and transitions to organic growth during 2026. Variants in 2026 are expected to grow by a low to mid single digit percentage in dispensing and specialty closures driven by a mid single digit increase in dispensing products metal containers volumes are expected to grow by a low digit single digit rate as a result of a mid single digit growth in products for pet food markets which now represent more than half of the segment volume custom containers volumes are expected to be comparable to prior levels as first quarter volume will be lower than the prior year due to a limited carryover of de-stocking activity which is expected to be offset by growth in the subsequent quarters based on our current earnings outlook for 2026 we are providing an estimate of free cash flow of approximately 450 million as operating earnings growth will be partly offset by higher cash interest in tax and slightly higher capex of approximately 310 million to support investments in future growth in dispensing and pet food products we are providing an estimate of adjusted earnings in the range of 70 cents to 80 cents per diluted share as compared to adjusted eps of 82 cents in the prior year period first quarter interest expense anticipated to be in the range of 45 million with a tax rate of approximately 25 to 26 per standpoint first quarter dispensing and specialty closures adjusted even is expected to be below the prior year period principally as a result of the year-over-year impact of the benefit of selling through prior year inventory in an inflationary environment in 2025 as compared to the headwind of some through prior year inventory in 2026 for steel food and beverage products and expected to be comparable to slightly below the prior level in the first quarter as a result of the impact of limited pre-buy volume in the fourth quarter of 2025 that pulled volume forward from the first quarter of 2026. Custom containers adjusted EBIT is expected to be modestly below prior levels in the first quarter due to the carryover of de-stocking activity into January. With that, we'll open the call for questions. Melinda, would you kindly provide the directions

for the question and answer session? Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one to signal for a question, and we'll pause briefly to assemble our queue, and we'll take our first question from George Staffos with Bank of America. Please go

ahead. Thanks very much, everyone. Good morning. Thanks for the details, Bob. Congratulations, well-earned retirement, and Sean, nice to chat with you again, and welcome to the call. I guess my first question, Sean, could you give us a bit more detail in terms of the first quarter outlook for DSC, just kind of the puts and takes that you see? I think you mentioned there was also some impact from pre-buy. More broadly, with DSC having grown now to being the largest business, I would imagine maybe you disagree that the order patterns, the operations, the way that business runs might be different than what you normally would have seen in a traditional silicon business, say, five and 10 years ago. So, Philippe and Sean, what – and Adam, you know, how do you manage the business? How do you manage forecasts? Do you keep your customers in a narrower band, well, to say what traditionally you would have seen in metal? And then I might have one follow-on after that.

Sure. So, I'll take the first part of that question, and Adam will take the second part. For the DSC segment in the first quarter, we're seeing low to mid-single-digit volumes, And one of the challenges that we're facing there is that we do have some low-cost inventory that we put through the system in the first quarter of 2025, so a little bit of a headwind going into the quarter to overcome that EBIT benefit from that position.

And then, George, on the dispensing especially closures business, the portfolio evolution that we've been talking about for the last decade, you're right, has moved that business to our largest business in the portfolio now. And you're also correct that it's a bit of a different business than kind of the historic food can business for Sylvan or maybe even some of the rigid plastic packaging businesses that the company started with when we were founded back in the 80s. You know, you think about co-located facilities that, you know, you're integrated very deeply into your customers. In many cases, you're buying customer assets, so you're part of their production model already right out of the gate. And I think as you think about, you know, the growth that we've had in fragrance and beauty and some of the personal care and home care products and dispensing, especially closures, it is a bit of a different supply relationship or more of a supply partner with an outside-in perspective versus being kind of on-site and deep in the weeds with how they're running their business. So I think we have some learnings from 25, so we'll be very clear about that. And I think part of those learnings are taking a broader view, a broader perspective on the macro environment and other influences that may affect our customer businesses more so than maybe just what's within our own two four walls as we are on site, near site in those kind of food can operations. So, you know, part of that, George, is as we've talked, you know, we've taken a broader view of risk as we've come out with our guidance now for Q1 and also for 2026 to try to take into account some of the unknown risks that maybe we hadn't included in guidance before, again, taking those

learnings from 2025. Adam, thanks for that. My follow-on, I'll turn it over to everyone else. For you to be, and recognizing there are no guarantees in life, right? Forecasts can be significantly above or below. That's the world that we're all in. At the low end of your guidance, what would be some of the key volume and margin considerations across the business? So again, not saying that's where you're necessarily going, nothing's guaranteed, but at your low end of guidance, what's embedded in that? Thank you.

Yeah, I think George, you know, I mean, Sean walked through kind of our volume expectations for each of the segments. I think, you know, we've got a pretty good feel for demand profiles and patterns with our customers and with the business that we have, I think maybe to try to answer your question, I would say, you know, broader market conditions that might influence our customers' demand for their products probably is one of the items I would point you to that could move us closer to the low end of the range. But again, we've taken a very broad approach to taking those risks into consideration to develop the range that we have and that's included in our guidance to the midpoint

as well. Okay. Thank you. If you find that your question's been answered, you may remove yourself from the queue by pressing star two. We go next to Matt Roberts with Raymond James. Please go ahead.

Hey, Adam, Sean, Alex. Good morning. Congratulations to Sean and Alex on your new roles. First on the DSC volume for 2026, I wonder if you can help me parse that out and bear with me. I'm I'm going to think about three in one here. But first on hot fill beverage, how did Vines perform in 4Q and the outlet there for 26 or contribution from new contracts there? In home and personal care de-stocking, was there any lingering impact in 1Q and DSC? I might have missed that. And lastly, in fragrance, that continues to grow at double-digit growth. And by math or comps alone, you would think that I would have to slow at some point. but based on customer orders or innovation pipeline, what are you expecting there? And is it a function of high-end consumer doing well or continued new product launches or partners expanding distribution channels? What's going to sustain momentum there?

Sure. So maybe just jumping back to kind of fourth quarter volume. So, you know, for DSC, Matt, really volumes were very close to what we expected, right? So, you know, as Sean pointed out, double-digit growth in our fragrance and beauty volumes. You know, personal care and home care, we had anticipated the de-stocking. It did happen in Q4, essentially right in line with our expectation. I think there is a slightly different answer here than custom containers. So to be really clear, we think the de-stocking activity is complete in our dispensing and specialty closure segment. And so, you know, volumes were right in line with expectations, including food and beverage as well. So fourth quarter played out pretty close to what we thought. As we turn to the full year of 2026, you know, again, as Sean just outlined, you know, significant growth, again, expected in fragrance and beauty. You think about food and beverage and maybe some of my comments I just made to George, our assumption for volume right now is going to be comparable. So you mentioned, you know, new contractual wins. Yes, there are some. We've taken an approach that we're going to include some conservative guidance for the market for our food and beverage, hot pill products, and sports drinks, et cetera, as we're looking at 2026, and we'll see how that plays out. Fragrance and beauty, it's really more of the same story. And I think, Matt, as we've talked before, the development pipeline for these products, it is multi-year. It's probably not quite as long as some of our health care products, but you're talking two to three years. So all of this volume that we're going to deliver in 2026 has really been in the innovation pipeline for us for several years. So there's really no surprise to us. I think the really important point here is that we keep getting rewarded with our performance from our customers with new business wins. We get a disproportionate amount of the new product launches they have, and that's what's continuing to drive, I'll say, the double-digit growth that we had in the last two quarters of 2025 and our estimate for 2026 as well. So maybe to go back to your question, Matt, I'd say it's for fragrance and beauty, it's all of the above. All of the things that you outlined are the reasons why we continue to grow faster than the market. And again, we take a lot of pride in that. We take it very seriously. We're working right now on 27 and 28 product launches and have a pretty good feel for what that's going to look like at this point certainly did appreciate all the detail

there um and as a follow-on i think that's about metal so 4q even it came in better than i think your prior expectations and margin even improved with the higher pet volume mix so as you continue

to invest and see pet food through growth there are there any contractual changes in metals that are going out as you continue margin expansion excluding any raw materials in fact of course

or was it cost outs that are driving strong results there? Any additional color you could have on margin expectations, absent RAS and 26?

There are probably three things to really think about. I think the single largest is the cost reduction initiatives that we put forward in actually all three of our segments. Certainly metal containers have had a good portion of that cost savings program over the last two years. So they've executed really well against that cost savings initiative and have lowered the overall cost structure. As you can imagine, you know, volume leverage in this business is incredibly important. So as you continue to deliver growth in pet food and 4% growth in the entirety of the business, that leverage is pretty strong as well. So it is helpful for the operating margin. And then finally, you know, you're right, we continue to invest to grow with our largest customers. I think it was, and guys, correct me if I've got it wrong, I think it was 2024 that we announced a significant long-term extension with our single largest customer. And we said at that time that, you know, there's nothing structurally changing about the contract, Matt, but we thought that that contract would be margin accretive over the life of the agreement. And it is playing out the way we anticipated. So that's a little bit more on the margin versus our cost reduction initiative. But, you know, our anticipation is our largest contracts are going to be slightly margin accretive over the life of those agreements as well.

Matthew, only other thing to add is whatever we have.

Adam and Alex, super helpful. Thank you again.

We'll go next to Gansham Punjabi with Baird. Please go ahead.

Good morning, everybody. And my congrats to Sean, Bob, and Alex as well for all the news and the promotions. Best wishes into the future. I guess, you know, Adam, if we go back to the dispensing closure segment and thinking back from a high-level standpoint on 2025, right, so if you, you know, I think you started to see the de-stocking impact on beverage pretty early on relative to the initial guidance, and then it broadened to other categories as the year unfolded. Have you seen normalization and demand for the categories that were initially into the downturn? And just more broadly, where are we on de-stocking? Do you still see some lingering impacts into the early part of the year, just given the sequence of what unfolded last year?

Sure. Yeah, I think you pretty much got that right, Ganchum. So the food and beverage de-stocking activity really took place for us. We saw that in Q2, and to your point, the rest of the year in food and beverage roughly played out as we expected. We think those volumes are now normalized. We think that year-end inventory levels in the system are at the level that our customers had targeted for year-end. And as we turn the page going to 2026, we're calling out comparable volumes for food and beverage. So we had a little bit of destocking in Q4 for our personal care and home care products in the segment. We believe that is completed in Q4 and won't have an impact on Q1 volumes for the dispensative specialty closures segment. Shifting gears slightly, there is a little bit of a carryover of de-stocking for custom containers, and really that just is a simple, probably unique position that that business has in our portfolio. As you know, Gansham, most of our customer relationships are direct. We've got a 10% to 15% distribution business in our custom containers or our plastic bottle business. And typically, de-stocking just takes a slightly different timeline in that distribution segment. Again, thinking just the simple fact that there's another layer of inventory in the supply chain. So typically, de-stocking starts a little bit later, ends a little bit later. And so we're seeing that carry over a little bit into Q1. saw that activity a little bit in January as well, so that's included in our guidance. But to be really clear about DSC, that destocking activity is now completed as of the end of 2020.

Gotcha. Perfect. Thanks for that. And then on Wehner packaging, you know, I think originally when you outlined the logic behind the transaction, it was going to be additive as it relates to growth. It was very complementary, et cetera. It sounds like the integration is well underway. What about the commercial synergy specific to the asset, you know, the underlying growth that you're seeing there? Any specific wins you can cite as it relates to, you know, step function in your position in pharmaceuticals and health care and so on?

You're right. It's been a great addition to our portfolio. I would say the acquisition integration is now complete. We achieved our synergy targets. You know, we're now 15 months, let's call it, post-acquisition. We've achieved our run rate synergy targets. And I think, you know, you're touching on an item that the commercial synergy has gone. And that's really not something we typically include in our synergies, but they're absolutely there in this business. And you're taking two market-leading dispensing businesses and combining them, particularly when you think about Vayner's position in North America, great products, very limited reach and very limited scope in North America. we've been able to take some of their products, their technology to our large food customers that Silvan has such a great history and relationship with. And we have been awarded new business, not only on the food side, but some of our other consumer products as well. So, you know, I think we're getting the best of both worlds between the two businesses, leveraging those relationships wherever they may exist, whether it's legacy Silvan dispensing or at the Vayner customer relationship level. and we're seeing growth opportunities on both sides of that equation.

We go next to the line of Gabe Hady with Wells Fargo. Your line is open. Gabe Hady, your line is open.

Yep. Sorry about that. Adam, Alex, Sean, good morning. Wanted to ask, we're hearing a lot of mixed messaging from some of your peers as well as, you know, customers trying to navigate the current environment. don't want to go down the laundry list, but population trends, affordability, GLP-1, et cetera. We're seeing some restagings, some strategy changes at big CPGs. I'm just curious, in this type of an environment, obviously nothing has been sort of normal, let's say in the past five, six years. But just as you look across your portfolio, think about your go-to-market strategy, your long-term relationships and contracts, et cetera. Do you see the current environment where it seems like customers are looking to reduce costs, complexity, things like that in the supply chain as an opportunity for Silgen? And, you know, how would you say that's incorporated into

your thinking and or the guidance for 26? Sure. I mean, I think, you know, 25 was a very volatile year for all the same reasons that you outlined, Gabe. And, you know, I think, you know, we all had to deal with that one way or another you know we quite a bit of our portfolio so you know i think we feel confident that our products continue to have good underlying demand even with population trends and affordability conversation you know the food can will continue to say even with some inflation that we pass through is the lowest cost means of getting nutrition to consumers that need So we feel like our portfolio of products is advantaged in this kind of environment and would agree with you that we think there's quite a bit of opportunity with our customer relationships, our portfolio of products, and, you know, some of the sustainability initiatives that we've got underway, not only just at Selden, but with our customers as well. Well, whether it's lightweighting or other cost-out initiatives, you know, those are always top-of-mind activities between us and our customers. So to answer your question, Gabe, you know, yes, we think those are opportunities. How that fits into our guidance for 2026, what I'd tell you is we've actually broadened the kind of view of the unknown risk as it relates to things like population trends, GLP-1s, affordability discussions. And, you know, we are well positioned for the marketplace and the volatility that we're all dealing with.

All right. Thank you for that. One, I guess, digging into maybe Gonson's question a little bit with Vayner, as well as I want to say in 2021, you guys have acquired Unicep. But just anything that you can talk about, maybe higher margin products beyond fragrance in the dispensing business where you're seeing growth opportunities, I think you guys will work on a couple of maybe unidose products and things like that.

Probably the next logical step of the conversation, as we've talked about before. And clearly, the margin profile, the growth rates of that part of our portfolio really are similar, if not even stronger, than what we've seen in our fragrance and beauty business. The size and scale of our pharma healthcare business, it's growing rapidly, but it started from a much smaller silgun. Obviously, with the Vayner acquisition, what we brought in from their healthcare assets and business portfolio has been very complementary, very beneficial. We are continuing to grow. It's a longer development cycle than what I mentioned on fragrance and beauty that I think you'll all appreciate so yes we've been working for many years on on some of these products and and have some that are reaching market now some that are in final stage development but the pipeline is as strong and active as we've seen you know really since you go all the way back to to um the acquisition of Westrock and I think as you know we were talking at one point that it would be disappointing if we didn't double the size of our healthcare business in college the next three to five years.

Great. Thank you.

We turn next to Mike Roxland with Truist Securities. Your line is open.

Thanks, guys, for taking my questions. Shawn, congrats on the role. Bob, congrats on your upcoming retirement. It's been great working with you. First question, and I just want to follow up on what Gabe mentioned in terms of Vayner. Can you provide some more color just around the wins that you achieved? You mentioned that in some of your remarks. So can you comment on the type of products that we're – or maybe speak broadly about the type of products that you've gained wins in and what type of growth you're expecting this year from Vayner with those wins?

Yeah, I think, you know, again, we'll try to say, Mike, that, you know, Vayner's been fully integrated into our dispensing business. So when we talk about dispensing products growing at a mid-single digit, that's including Vayner. And, again, we fully lapped the comparative. You know, we acquired the business, I think, in the middle of October of 2024. So, you know, those results, for the most part, were already fully comparable in our fourth quarter results. So, you know, I think combined we feel confident with that mid-single-digit growth. I mean, you know, the product portfolio and where we're able to get new business awards with the combination. I'll give you a great example. Again, in the North American market, you know, we talked a lot about during the acquisition that they have a terrific valve technology for their business and for their portfolio of products. And that's really something that we were very small in at Silgen. And we've been able to take that technology and apply it with other customers that really advanced kind of Silgen technology with existing customers. So, you know, I don't know how we want to give credit there. It's an existing customer for Silgen, and we're using Vayner's technology. So I think we all win in that scenario, including our customers. But it's really the power of the combination is, I think, the bigger part of the. Some other products, again, just the enclosures. And we've just been able to continue to leverage that strength on the Vayner side and grow out that part of our portfolio, particularly in North America, with our existing customer base.

Got it. Very helpful. Appreciate the color there, Adam. And just one quick follow-up. In the past, I believe one of your peers around mental containers may have picked up some of the tomato business, which cost you some share. With this bankruptcy settlement, it appears that one of the asset buyers is getting some of that business back. So could you potentially regain some of the tomato share that you previously lost? And then relatedly, you mentioned in your script that you'd expect no further issues from this customer that was in bankruptcy. If there are no other changes on the assets continue to run as is, can you remind us as to the total EBITDA loss in metal containers, if any? I'm not saying there is any, but if there is any EBITDA, if there's a reset lower, could you remind us what that is? And does students still intend to pursue any asset rationalization and consolidation in metal containers?

And maybe it's not fully resolved. It's a process, and they're making progress in the process. So you're right. there was an auction, and there were three winners of the auction. I mean, the business that we're talking about really falls into three categories. There's a broth business, a fruit business, and a core vegetable business. So, again, the broth and the fruit are going to our customers that we supply today, and so we feel pretty good about the ongoing relationship there. The veg business is a new player into canned vegetables, but a prominent player. I look at that and I say, you know, on the bench side, we are co-located, incredibly well positioned to continue to apply all of the can requirements that that new customer would need to continue to operate the facility where we are co-located. So I think that, you know, again, we'll see what happens as final resolution plays out. You know, we're taking, again, a cautious approach to our thoughts here. We don't think there's significant upside. We don't think there's significant risk from where we are either because of those ongoing relationships and the supply situation of where we are. Regarding our facilities, again, we're going to wait and make sure we understand exactly what the go-forward position is once the proceedings have reached a resolution. But, you know, as part of our $50 million cost reduction program, we had closed a facility in 2024 that was supplying fruit products to that customer. And we consolidated that into other operations to get the benefit of the consolidation. So really nothing to do from that perspective. And, you know, I think it's a great question for the next earnings call. Hopefully the entire process will be resolved. But, you know, for us, Mike, I don't view 2026 as having any further risk than what we're doing.

Got it. Great to hear, Adam. Good luck in the quarter of the year.

Our next question comes from Anthony Pettenari with Citi. Your line's open.

Good morning. With regards to the steel and aluminum tariffs, is it your view that customers and consumers have sort of fully absorbed the impact of the tariffs and it's, you know, reflected in their behavior and the price of the package? Or is it possible that you could see some kind of lagged customer change or consumer change over the course of the year, you know, either changing product positioning or consumer change in behavior? Just wondering how you kind of think about that in 2026. Yeah, well, and maybe

let's start with 25. It was a very volatile year on raw material cost because of those tariffs and kind of the limited notice that we had to deal with that prior to the implementation of those tariffs. And Anthony, as you very well know, our contracts are sort of designed to make sure we are insulated from those kinds of activities. So we contractually pass through those costs and those tariffs onto our customers and they then onto the consumer. So, you know, I think, you know, tariffs were kind of, let's just roundabout call it mid-year, you know, April, May, June of 25. So there is some full year annualization of those costs in 2026 as we get a full year impact of those. I do think the market has absorbed those costs. In many cases, our customers have passed those costs on through to consumers, and they're now really challenging themselves on kind of promotional activity, trying to understand what the price elasticity is across the board for those products. But to be really clear, the food can, we still think, is competitively advantaged from a cost standpoint on the store shelf. Again, for those consumers that are looking for nutrition, we think it's the lowest cost means of getting nutrition to those consumers. So, you know, we're still talking to our customers about their pricing activities for 2026. And it's a blend. It's different by customers. You can imagine there's a blend of promotional activity. trying to drive some volume there's also you know still some conversation about cost recovery so i think we'll see it play out more as we get through the year but i think it's a balanced approach that all of that means i think it's fairly well absorbed in the market i think our volumes again nice growth for food cans in 2025 um we'll see continued growth in 2026 as well so we think that particular package is positioned very well even with the tariffs that they've

already incurred. Got it. Got it. That's very helpful. And then just switching gears and following up on healthcare and the opportunity there, I think you disclosed that healthcare was 3% of sales in 2024, maybe at better than company margins. You talked about doubling, I think, over the next few years. So I guess just to make sure I got it right, should we think about healthcare maybe going from low single digit percentage sales, maybe the high single digit percent of sales, you know, in the next three years or so or something like that. And I guess related, are there acquisitions that could really accelerate that exposure or is it really more kind of the organic growth with, you know, clean rooms and all the stuff that you're doing internally?

Sure. You know, again, it's a great market. We're excited that we're continuing to grow and what the future looks like for our healthcare business. So I think you're right. I think you mentioned a 2024 number, so it's grown a little bit beyond kind of that number, I would say. We're still in that $200-ish million just as a proxy of total revenue. So could that easily get to $400 million over the course of the next couple years? Yes, we absolutely think so. How do we get there? that's with our own pipeline, and that's with our own kind of contractual obligations that we've already secured over the next three to five years with the drugs and pharma and healthcare products that are in development with our largest customers. I think you raised a really good point, Anthony, that, you know, I think as we, you know, have continued to expand our dispensing and specialty closures segment, with each acquisition, we say it opens a broader horizon for future acquisition opportunities. Vayner is a great example. It brought a lot of different products, but it brought a very strong healthcare business with it. And we think that opens up even more opportunities from a corporate development perspective and where we can inorganically continue to grow out the business as we've done in the past. So I think we even said it in maybe some of the prepared remarks, the opportunities for organic and inorganic growth for Silgun are probably as great is at any time in my 21 years that I've been with the company. And, you know, we're extremely positive and excited about what the future, particularly in healthcare products, looks like for the company.

That's very helpful. I'll turn it over, and congrats to Bob and Sean.

Once again, that is star one to signal for a question. We'll move next to Daniel Rizzo with Jefferies. Please go ahead.

Good morning. Thank you for taking my questions. So not to belabor the point, but on the last call, I thought consumer caution within dispensing and also in custom containers was kind of something that bared watching because of, again, affordability issues and things like that. But it seems to have faded. So I was wondering if that was just kind of a temporary blip amongst your customers or something that kind of bears monitoring over the rest of the year.

Well, I definitely get bears monitoring over the course of the year. I think, you know, what I was trying to convey, Dan, is that in that affordability discussion, we think our products are incredibly well positioned to be a very positive value during affordability across a whole bunch of different products. And that's really where a good swath of our portfolio sits. So we actually encourage that conversation, and, you know, we'll be watching it closely. But we think our products are very well positioned for that discussion.

Right. And then with everything that's happened with your bankruptcy with the customer, does that change how you kind of, I don't know, design contracts or do business for the customer like that or just in metal containers in general? I mean, is this just kind of a one-off thing that you just moved past?

Well, again, I think since our founding, this would be the first large customer bankruptcy that we dealt with in our metal containers business. And I go back to the contractual nature of this part of our portfolio, that it's just the contracts have been so well written, so well written over a long period of time that the company did not face any detriment during the course of one of our large customers going bankrupt. see during the year. So, you know, our teams did a great job of protecting the company, but in fairness, the contracts allows us to do that as well. So, you know, I think it's just, Dan, it's more of the same as far as the contractual nature and the protections that we build in to those contracts to make sure we protect our company and our shareholders from any adverse outcome.

All right. Thank you very much.

We'll go next to Anaj Shah with UBS. Please go ahead.

Hi. Good morning, everyone. Thanks for taking my questions. We have some new FDA food guidelines that came out recently promoting protein, and it seems to me like that would be pretty positive for your metal cans business. Do you see that as a significant opportunity for you, or are there offsets elsewhere in the portfolio from these guidelines?

Sure. I think we're working very closely with our customers to make sure that we help them position products into the marketplace to really accommodate or maybe incorporate the new FDA guidelines. So, you know, we look at protein as part of our portfolio and, you know, our high protein products. Again, the can is a great vehicle to get that nutritional value to consumers. And sure, I mean, we think it's an opportunity, but there are several opportunities that we continue to work on um you know i so i do think um we're working with our customers there's nothing specific that we're outlining in our guidance or anything at all it's just one of the puts and takes that we would typically consider as as we give forward guidance and then no just for um okay

thank you for that and then also just your capex this year is stepping up modestly i think about 10 million year every year and you mentioned dispensing and pet food growth sort of driving that any details you can give there on what where you expect capex to step up and i'll turn it over

yeah i think our this is sean i think our guidance was 310 million for 2026 and really that's that's driven by honestly we're um under a long-term agreement to do yeah just maybe to add to that if

you look back over the last 30 years of of our capex portfolio you know investments in wet pet food have been very consistent in our CapEx profile. It might not be every year, but we are investing to support that customer growth, again, driving significant volume growth for the company

over a very long period of time. Great. Thank you. We go next to Arun Vishwanathan with RBC Capital

Markets. Please go ahead. Thanks for taking my question. I guess, yeah, first off, congrats to Bob. Great work with you over the last several years. And Sean, I look forward to working with you as well. And then just on the results, so the guides, I guess, first on volume. So I think you said low to mid-single digits in DSC and low single digits in metal driven by pet food. Just curious on the pet food item, because you do face a pretty tough comp there and um you've seen some volatility so maybe you can just kind of parse out um what drives that and uh i guess where are you in kind of penetration in wet pet and then on dsc um you know i think you had a you know relatively kind of choppy year last year just given some of those consumer trends would you say that um you know you've kind of settled down and were there any execution issues that you had last year that you've maybe addressed, or was it just mainly

market impacts? Thanks. Sure, maybe a little bit. Those are definitely market-related activities that were the two items, I think, in DSC that went a long way to challenge kind of the performance and fragrance and beauty that was fantastic through the course of the year. So moving over of metal containers um again you know i think if you think about wet pet food this has been a an annual grower for us for decades and we've been a requirement supplier to our our largest customer uh since we bought assets associated with their business and you know they've continued to invest in capacity um aruna you know i know we've talked about this before but the the primary um well so Those populations have grown over time. They continue to grow going forward. I think wet pet food in these categories is considered to be a premium product. So, you know, we haven't talked a lot about the K-shaped economy on this call, but as you get back to some of those larger macro trends, the high-end consumer is still seemingly doing pretty darn well, and we see that in our wet pet food segment. And then the last piece of it, and we've seen this for decades again, And once wet pet food, it is very rare that they move out of the category in a cat or a small dog. Large dog moves in and out, and we've always talked about that. It's a very small part of our portfolio. But for cats, you know, we've seen the stickiness of that product with pet owners and with the consuming animals for a very, very long time.

Thanks for that. And just as a quick follow-up, just on the cash flow. So the 450 guide, was there any inventory impact or – and is there, you know, potential for upside if, you know, that's not as bad? Or how would you kind of characterize that 450? Is there any, you know, kind of variability in that? Thanks.

Yeah, this is Sean. We normally have working capital improvement initiatives every year in our free cash flow, and 2026 is no different in that regard. I'd call it a modest amount of working capital improvement. But generally speaking, we're expecting our operating earnings to go up, call it $20 million, $25 million. And that's offset mostly by higher cash interest, and that gets us to the bridge of that versus our $20 million.

Thanks a lot. And we'll return back to the line of George Staffos with Bank of America. Please go ahead.

Hi, guys. I'll try to make it quick. So you've talked a lot about on this call here and there kind of the impact of healthier living and the like. As you've analyzed across your categories, is it a net positive, neutral, negative, all that commentary relative to the end market growth and the man you'd see across, you know, food can, DSC and custom containers as you've analyzed it? second question related, you know, we've seen over the last year or so new products, zero-calorie products on the beverage side. Anything that we should be aware of that could perhaps help growth in the dispensing segment for this year or in the next couple of years that you know? Last question from me, just on availability in the supply chain in metal, steel, and aluminum. And I assume you're doing fine. Just wanted to check the box on that. And has there been any commentary at all from your suppliers about maybe bringing back some tin plate capacity to the U.S.? So thanks for that, guys. Again, congratulations to everybody, to Sean Alex and Bon Voyage. Bob, talk to you guys soon.

Thanks, George. As far as, you know, the healthier conversation that we were having and its impact to our volume growth, I mean, I think it's relatively neutral to our volume growth. I mean, I think we're, you know, we're well positioned already for a variety of outcomes across the portfolio that we have. It's a bit of the intentional nature of how we've built out the portfolio that we can do well in different economic circumstances. We can do well with different consumer preference patterns evolving and feel pretty good that, you know, we've got that captured. and we'll support our customers in whatever way we need to. I think 26 on the beverage side is going to be a year of innovation. One of our largest customers has clearly stated that. And whether it's zero calorie or a better few products, we're watching very carefully to see what is new volume brought into the category versus cannibalizing some of the existing products. So, you know, again, I'd say roughly we're neutral in that scenario because the cannibalization is just, it's a similar volume, comparable volume to what we already had. And I think they're looking at it from a value perspective as well with potentially healthier 4U products requiring a premium in the marketplace. And then as we think about, you know, aluminum and steel supply, you know, our two largest expenditures that we have and critically important to our customer success as well. You know, we've talked a lot about template in particular in the U.S. market and the U.S. market being a net importer now with significant tariffs. So it's a challenging environment. You know, we're one of the largest buyers for both steel and aluminum can sheet anywhere in the world. So you're right, you can check the box for us. We get the products that we need. Our contracts allow us to pass through those costs, whatever they may be, to our customers. We take that very seriously, and we fight like crazy to get the lowest cost for ourselves and for our customers, George. But, you know, I think the market dynamics are continuing to evolve. I'd love to tell you there might be more 10-plate capacity coming on in the U.S. It has to be high-quality, wide 10-plate capacity for it to really work well in the manufacturing systems that not just Sylvan but can manufacturers have assembled now over time. So there will be some hurdles to that. So I think our perspective is it's going to be more of the same as we go forward. We'll continue to get the products that we need, and regardless of where that supply comes in from, We'd love to buy products, raw materials in the market where we're making products and selling products. Unfortunately, the way the template market in the U.S. has evolved over time, we're no longer able to do that.

We have no further questions. I'll turn the floor back over to Adam Greenlee, President and CEO, for any additional or closing remarks.

Order results near the end of April.

Concludes today's conference. We thank you for your participation. you may disconnect at this time.