Greif Inc. Class A

Q2 2021 Earnings Conference Call

6/10/2021

spk_0: i thank you for standing by welcome to the great cute you twenty twenty one earnings call at this time of participants are in a listen only mode three he advised that a date conference is being recorded after the speakers presentation there will be a question and answer session to ask questions during the session you'll need to press star one on your telephone i would know it to china call over to speak today that i click please go ahead
spk_1: flush cash run every night like an order fiscal twenty one liners and conference all and i'm joined by people and i president chief executive officer morneau timer or as chief financial officer people are with a question that the and please call to orange with actually teacher disclosure we urge you to ask questions regarding you can turn portland because been and especially mature on another information that you launched tweet limit yourself one question one follow before returning to the cute please turn fight to as a reminder don't call we will make for instance volume and his expectations and bleached related future events actual results could different early from those gotta additionally will be referencing certain non financial measures to reconciliations most directly comparable treasures can be found in the andrews at the end and now in turn the presentation our t on five three a little bit more together when early really appreciate your interesting right or purposes gripe disabling package and protect our customers kids and materials the survey at central leads of communities all around the world and that common purpose combined with our vision to excel and customer service times or or colleagues and low they sought to perform at our best an hour late short time the global growth team for these efforts in the second quarter was generated of year over year line growth and most for keep local national packaging substrates we also experience robots to man and our core a cheater network network and significant the man improvement and our children course business while play should remain challenging we are actually shooting strategic pricing decisions and contractual price increases to recover cost and standard of inflation curve distance don't focus is helping us deliver solid financial results and reduce our leverage or second quarter adjusted free cash flow grew by more than forty seven million dollars cent prior year and rude pay two hundred and thirty five million dollars in debt with improve the ball into the that have three year we are we reintroducing should school twenty twenty one a little guidance and intensity generating adjusted class a earnings per share of four dollars and seventy cents at the lint with finally we continue to make meaningful progress against our strategic priorities we recently completed our fourth annual colleague engaging and survey which running certain that the fall of all manufacturers in addition we published or twelfth annual sustainability report reflecting the progress with they early as today and enhanced our customer service capabilities in line on our stated intention but ask you little turn the slide for the global national banking business deliver strong second quarter results google steel drum volumes increase by roughly three percent on a per day basis first prior years while global rigid i sees and large plastic things by volumes rose by nearly eighty percent of the per day basis and our global i the sea lions were quarterly record average selling price is world across all keep global substrates year over year general or castro arrangements and strategic pricing decisions the man was strongest in a pack were still drama in rigid i you see an apology sea lions rose by fourteen and eleven percent respectively wanna party days his first a prior year and benefited from improve industrial trends the man conditions are solid trot last month to europe or steal drawn richard i'm he sees season out my be ruled by mid single digits a party basis in north america which features are most diverse product portfolio mess still turbines were down a single digits for real rigid i d c is fiber drums and apply the sees displayed in a bid single digit growth on a party faceless first prior year we continue to your through menopause many of our key and markets for example cells into petro products and lunar can and markets and proves he quietly and or higher year over year peyton coming sales also ruse rose to to better auto in construction million and sales in the balkans specially chemical bond markets for negatively impacted by ongoing customer force majeure actions and supply chain constraints for underlying the man still remains valid we see little indication of customers rebuilding inventory and while supply chain conditions remain time we have not experienced any negative material impact related to sourcing raw materials p stronger volumes in the higher average selling price is true of higher segment sales and gross profit year over year chinese second quarter adjusted ebitda rose by roughly seven million dollars to the higher sales partially offset by fire as she the expense mainly attributed to and thirteen and a half million dollars of higher an astronomer carl for the second the business also then and from benefited from of southern a dollar effect tail and and for comparison parkinson's please keep in mind the t i p had a very strong to twenty twenty one the segment benefited from panic buying an opportunistic sourcing benefits p strong second quarter performance carried over and may the start of our fiscal third quarter local steel drum and rigid i the sea lions both grew by load image double digits or not per day basis first the prior year due to stronger market demands and leisure prior year comparison see constantly versatile were basically flat may lives are filling business improve notably from early and you to lose which is one indication that conditions need us gulf coast are starting to pick back up and please ask you to term sly side paper taxing second quarter sales rose by roughly thirty five million dollar first the prior year due to stronger minds and are correlated sheet and to been core businesses and har college containerboard a box corn prices for comparison purposes the prior year included thirty five million dollars in sales are true it has been the best and cpt business
spk_0: paperback and second quarter adjusted ebitda fell by roughly eleven million dollars for the year primarily due to a significant twenty four million dollar recovered fiber and transport costs ten and as she expenses also increase your rear and traveler to the eleven an athlete and dollars and higher and said
spk_2: i'm a cruise
spk_1: in march we announced a new set of price increases for for recycled box for grades with immediate effect in response to strong demand and cost inflation and we have fully implemented increases under all non receipt on customer contrasts and will benefit from this in the fiscal third quarter solo record or i'm the man and are converting author operations remain robust second quarter lions and core choice article courted and she's to your system or of roughly thirty seven percent per labor supply you're poor and demand for durables e commerce growth the auto supply chain and food and bad to remain very strong specially sales which includes little laminate the ball packing encodings worth more than thirty one percent versus prior quarter times are to been core business accelerated through the second quarter work nearly six percent first the prior year
spk_2: in addition to continued strong the man and construction instilled and market segments demand for texas picked up this quarter and reflects the old age they increase year over year in this business
spk_1: taper bashing school third quarters off to a strong star and mayor lines and court choice and our tunes and core business for a total double digits on a per day basis first the prior years and reflect flat to single major grocery clerks really versatile and as you now have turned a slide settings i'd also like the take a moment the highlight are ongoing year she efforts that are that it in your strategy in april we publish or later sustainability report outlining the years to achievements we made each morning twenty as well as the outcomes more second materiality assessments which helped to shape our future try these we also recently announced a new greenhouse gas reduction targets than continue to advance projects no for product circularity finally we are deploying and inclusive leadership program to all global managers to out the remainder of twenty twenty one to further enhance christ already strong engagement engagement culture i encourage all had a visit our website to review our sustainability progress can become more familiar with our strategy i'd like to now turn it over to your chief financial officer learn else on be a morning everyone please turn to slide seven to review quarterly financial performance second quarter net sales excluding the impact of foreign exchange goes by thirteen percent versus prior year due to stronger volumes and i are selling prices in our two primary that the segments second quarter and japanese but i fell by roughly three percent versus the prior year or boss sales were higher cost inflation especially in transportation and as he see track on profits and ip we are implementing price increases in response to strong product and the and and state of inflation in order to maintain appropriate profitability we are working diligently optimal many price increases in paper packaging as we respond to robots demand the mg get return to appropriately segment profitability as next baddest rose by roughly twenty six million versus the prior year quarter due to roughly twenty five million on higher in santa cruz across the company this year over year changed due to a cruel decrease last year as we forget did a poor two three and second half which the here has one two and and cruel increase due to a large anticipate strong second half result being substantially over budget our second quarter non yeah tax rate was twenty percent deflecting a one time that that of roughly four million from return to prevention adjustments and reserve releases dude a lot of settlements and statute expirations second quarter ejected class they earnings per share rose by roughly nineteen percent two dollar in cambridge here finally adjusted free cash flow rose by sixty percent nearly a hundred and twenty seven million dollars versus the prior year primarily due to improve profitability and working capital and partially offset by slightly higher capital capital expenditures failing to on our working capital as percentage of sales improve by hundred and eighty is pointless gear over here to just over eleven percent please termed as likely to review our outlook and he modeling assumptions we can we energies and old times even better visibility into the remainder rough is quicker he continued confidence builder is improving kind of house the transformation that we managed honestly and like in two thousand and thirteen as produce tangible in a meaningful change with are anticipated fiscal twenty one results we all have more than doubled earnings per share since two thousand and fifty is buying a car with nine teams negative in that include your indoor to me for two more than seventy nine noncore were some optimal i and come about any share repurchase benefit in fact we currently have six hundred thousand more shares outstanding how vs behind in two thousand and fifty we for gas or physical twenty one just free cash flow range between two hundred eighty five and three hundred and twenty five million inclusive on between one hundred and thirty two hundred and fifty million spent on cat bags and we're back working capital to be a substantial cast uses year commensurate with our in house prices increases donald a cost and play finally we assume that only see what happens is hundred and one dollar for time or this fiscal year of and hundred and twenty two dollars and time during our second half we expect fiscal two thousand twenty one is for expanded range and ninety seven to one hundred and one million and are for you know jack tax free to be between twenty two and twenty six percent please turn side nine the have a consistent three pronged capital deployment strategy focused on reinvesting in the business returning to shareholders and the balance sheet during the quarter we paid roughly twenty six nine and dividends and two hundred and thirty five million dollars in debt or compliance leverage ratio three point two times and of people die urged him to down and twenty one and we continue to drive toward our target range of two to two and a half times as a reminder you will not engage in any material a until we're back within that range finally as we continue to yeah the habit and reduce laboratory you're damn right into the benefit of our equity holders and eventually new jersey and a we increasingly evident policy with answering the call back with the first close encounters before and una he learned at everybody and please turn slide and in iraq and i cried delivered really solid second tour on please were busy performance from a install progress across all worse key priorities are focused on the operating levers within our control our extensive global portfolio differentiated service capabilities of are sharper focus operational execution decisions as to uniquely serve the needs of our customers and thing and carriers to a significant increase in the better part of our shareholders and i really appreciate your interesting right amy please feel free over the line for questions
spk_0: thank you at this time movies conducting a question mark fashion to offer any questions as possible the and fifteen feet from answer questions to one question it's one we made a follow up in a that we had to the king friend he can smoke question your first question of consult the line of towards tahoe to think of american flag and start the line for them
spk_1: k thank you very good morning everybody thinks the details are not yourself good to hear your voice is oprah well i'm so much and questions and they're related so we'll look at the implied god and for the second half a you this is my breathing you'd be looking at some boomer know third and fourth quarter earnings yeah you know certainly inflation has been a a major edwin for you watch games you what two or three thing is you confident that the got into given his is manageable chewable even real that pretty large had when right now on inflation the related question can you talk to what placing assumptions you have built into that died and and you know if an existing cause are putting an order today with you specifically here on on your be one of the pride said they are paying versus the made public price thank you gotten one settlers and can feel proud to as well off know we have a high degree of confidence on our pattern of working to stay ahead of inflation particularly in our global industrial products business where we haven't given i stay more direct control on pricey with our crackerjack mechanism on contracts but also are openers for other items the teachers millionaires television as we've been talking about inflation for a couple years now and we see things playing our time even our third quarter out we have a pretty good visibility into the fact that our our margins are going to a fight with grow in crackers proper dollars in their top of the damage to the fourth quarter in our volumes isn't the first month of our current quarter grew an exceptional levels and snow we're not seeing any living smiling at them were foolish on the economy and mortar and bulletins day with inflation in fact him in the like nursing taught thirty damage as the mechanisms is actually helped our value as significant as just the time inventory illiteracy against the price increases get with respect to the time in a company as he home as l p got mentally in his remarks we have executed every dollar of the price increases that we've announced can are you getting next time business in our your a business sixty percent of our is that didn't not kind of guy risky and eggs so yeah we we haven't avenue and how does one hundred and fifty dollars since last october and we're getting every dollar of it in the market and i'll give you any other candidate so on tour from of our own standpoint again a flourish said elixir a strong end of the a strong second have gone and early consists of always seen in cute in terms of pricing to larry's point lotus to you are paid to give you perspective so long thirty nine weeks flaws in this grade our customers on allocation we're mental capacity and take out any and in customers at any price at challenge it isn't as we both indicated all or long contract house measure up to four hundred fifty dollar tom price on and now that that's that's a real and burger robots market are priced got move into into our full of your guidance is what we've realized in the index is today slow doesn't doesn't for kept any future potential price changes which we're not gonna comment on any with
spk_0: okay that the great detail i'll turn over and did i thank you thank you george
spk_1: next question comes from malign escape haiti response back on your eyes open kate wearing the morning be as warning at school thanks for the to live with and i was on i guess more of a high level question i'm looking at kind of housing starts and i'm just looking at some different research out there talking about potential for the urbanization and on like an luggage and i look at the five year average for housing charges were on one point two five million and projections for that the deed in a one point five million plus sized account will be nice if you can remind us sort of and your two different businesses where you're at the high exposure to construction and or changes shirley on whether it's carpet tubes and and corps and stuff like that on and and like a business has looked like navy over the past couple years and and then what benefits a couple of i'd i know typical meeting one and the jackie business i'm sure you don't have great line of sight of tough or sundays pains and cody the center of made off my and with just
spk_3: directly that's been a drag and and could potentially i said i'm meeting somebody should for you
spk_2: not actually push against oh no
spk_1: chandler listen you said it our children course some the key caveat eggs and market short carpet in in love it will go into a house and as you know she's and nineteen we're week to been core of i have that was part of the and markets a weaker those are starting to recover glad that would have the growth and home all building and arguably listener so that's part of why work are changing course are almost six percent year over year in the corners are are our the restaurant a touching doesn't as for choice and are mills as you know this or raw material supplier so it's more difficult to align the enlarge as should act as his furniture it does help indirectly for our mills and ensure our core choice operations and provide products that go in the new loans and and buildings are largely on t side either when you look at the chemicals that we produce many those chemicals or for a flexible so
spk_2: or reshoot phone and those are all components in either go and just furnishings
spk_1: furniture laminates materials and going to home so and certainly has been one part of the and market segments that has improved and will continue to help our business also on our peace and the game i'm doing little where you going on in construction but yeah we all know what's going on auto same and day where she's been burning shot wears kind of is or semiconductors what interesting for us and were young we talked about before
spk_4: catch on and longview we talked to last year listening cause we charge times which come on well brain
spk_1: every guy and by wants to choose kind of still on the leaf and what interests you that the volume scan are the remainder of our here are still projected to be significantly below
spk_5: yeah are people out so we believe wants to have even more positive in front of us and now a lot of like instructions guns and and labor
spk_6: in to worker
spk_1: my okay thanks for that guys and then i guess dialing in on on t i p in the second quarter inch from in make sure that i i heard of it incorrectly thursday they're actually a fourteen million dollars swing i think in on i tunes and of com and then six million benefit from a long materials last year the did not record this year and then it's a even if i just for the sudden million dollar swing in effect it looks like there's those effectively one hundred percent drop through from from volumes and i know that's not the case i'm just curious if if he can parse offer us if there's any sort of benefit from that utilization or once the improvement was your we're and i yes a lot of cost outside i guess really what we're trying to understand on turner's and is is what the benefit is can go forward on mobile normal draft you should be from volume vs on structural constant currency as a mate yeah i'm gabriel v
spk_7: watch drivers
spk_1: the improvement e g p really about to march and explosion that you please
spk_4: dr is over the past few years and we talked about in private quarters
spk_1: dramatic improvement exo mars mechanisms entire watch to be acceptable lag really drives improve time when you are having rapidly increasing raw material costs so good in march expansion my job challenge improving our costs really
spk_8: large expansion of relativity pricing and processes
spk_1: and down the openers for draws some of making sure that she contract renewals we usually very aggressive on pricing because we enjoy your inflationary infuriating last compound at the alamo if she huge tax and the past the the battering caught improvement is actually a relatively minor part of this sounds really volume march two hours to compound and game one at load of tara line with certain that healthy market demand and hour and markets are also seeing early could do that and smart strategic capital investments protect around i did sea lions adults and the idea she'd reconditioning and are better than sitting in a plastic tromso also get three additional blowers
spk_9: they're going to end the houston shanghai into central europe so now the strategic growth and it shouldn't are as and based products will continue to to benefit that businesses well
spk_0: a little bit of next benefit thank you guys
spk_1: your next question comes from the line of mark levin pml capital markets nike lines are open thank you good morning very good morning and morning had keep going on i wonder just the start our larry can you talk with us a little bit about what we should expect from kind of as dna in the in the back at your me at that is a big jump here in the second quarter and eight really iran offset a lot of the improvement in gross gross profit thoughts on about eleven percent levels i'm just trying to figure out whether type of level is something we should expect kind of through the back half of the year he asked her why she married him yeah we we couldn't focus on how we drive on test cause out of business and some of that do with the fact we took over when we acquire terrorist are was higher than than ours and we continue to work on that pinch that way because of the hell would impact on people are yuppie system unfortunately as pushed back to how about six to nine months i'm very simple and asians next having some impact on our our as a hostage and an adjustment that we mention joey's of them play just gotten performance germs and and cow play out over time to get back to new york tarnished levels of much were virus p o r r charges which is the case this year so he specifically know if i looked at him back and here and we we do anticipate any
spk_10: spanish job for the remainder sure to put the kids about twenty one standard for sharing an island and drag relative to what was in the first half of the year
spk_1: a that because we will start to see more travel on
spk_11: critically relative to last year but even relative to the first part of the here now would actually go crazy
spk_1: stop we finish to be significantly lower isn't was prepared but he is going to be hired a second half of years eyes and ears i look at operations his whole i just walked said the first half years by seventy four he has aeration excluding the o c d impact is gonna be a left him about it out and twenty two cents a share that center in there is a twenty one cents a share of higher as expanded in the second half of the year versus the perhaps and part about thirteen back to that is an additional incentive increases fortunate second happier as it's or and out over the remainder the your dad d r setting thing as as a higher only seen the second half the year than versa i am i was just that is lock seven lower interest expense one sammis i share higher tax expands because and bang the higher earnings and can and hunters out forms and and and allowed ban and the i other miscellaneous stuff cause you to ninety six for the second half the year versus first half one seventy four i will you exercise books or edge and then i just as a follow on i'd like to come back and teargas question around pricing you you talk about sort of bird in fact that these open market not indexed you are be prices and that had been fully grasp your i'm just curious if we think about the paper segment overall what would be an approximate number on canada's just quarter to quarter group improvement as we go into the third quarter is i look at it the and like you must i had a limited benefit in the second quarter from that second containerboard price hike and i'd also like to get so if you could confirm that and and i'd also like to get some sense of where pricing is actually moving in the uncoated business on a converted products so you've you've raised cannot open market you are be prices but what's happened to bin core price
spk_3: susan what sort of a caden thing for kind of roll through in in converted products
spk_1: yeah felony charge like container more march as you know that that's for sure that that to to our middle sister started at the at the end of the last month or second chart shows i will i saw catcher in sri sri i'm mad sixty dollar a tiny increased so we gotta talk for cash or like downstream and corrugated that's been a very strong market we have actually guy outfit an ad he burned quickly after the they can cater more increases so two three and our corrugated and a word system or full implementation and that offset by hi roshi c and higher chemical cost at ease was the center of us for pricing standpoint thousand capture that follies some are converting and on encouraged so lead an hour shift hundred fifty dollars a time the index is only recognized eighty and as we both said we have raised all are non contract prices the full hundred fifty dollar time price in a median of sad clown downstream into the core is very similar to our korean and implementations didn't are strong ah we've been very aggressive with it and which are fully capturing that business on pricing on the tube in court as this and really look at a gps performance overall are converting businesses courtroom listen to been core performed at very high levels the big challenge we had his in the middle sister marie have the price call squeeze
spk_3: the with a cc and chemicals and catching up on the price so we'll start seeing and que three and queue for that realization as to out price
spk_1: i'm tell you to trp we don't have downstream capability we most recently and mouse fifty dollars on that saturday in july sam oh so the index is only recognized seventy and again the nine and a contractual customers that are related index are all up
spk_0: the hundred and forty and fifty dollars on the into landed in july has shown that it covers what you're looking for me
spk_1: now that of opening be things were more forgiving next question comes to the it and i'm just saying the key then out of your line it's open thanks good morning everyone hope you're well and warrior morning pete morning i met at laurie one pack so if if i go back to your industry day in mid two thousand and nine you're talking about a significant improvement in your tax strategy in and you met your long term targeted adjusted tax rate range was twenty six the thirty if you hit a low and of your guys this year you're going to be down to twenty two so it strikes me as a and is as an exceptionally low to adjust the tax rate even compare to what you're thinking two years ago when you mention all the improvements you are making in your tax planning so you can you just stop and and over the past four years had the you've consistently outperformed your tax rate guidance from the start of each year so what did your long term tax rate expectation is this your anomalous in any way and just of us understand what's going on there is you been meaningfully undershooting the mark on tax yeah and i think we actually if you look at your pace most the time we can within reason the lower or sheepish iraq yeah conference back and seventy what is what we'd like was also pre tax reform which lowered us tax free pretty significantly seriously was a benefit of a few points on their range that we provide and to were just how the other at home dad impact your tax radius is i also had a lose weight we had a lot of reserves and on center for some planning things were he he was really which were required to have as preserves established we were the through a lot of the statute of limitations and a lot of weeks dmz from the u s countries around the world and we've got you through those we've and verbal settlements on a lot of knack for a result in those reserves been released oh there's no longer contingent tax liability relate to those in those those things are what's causing some of that have bumping assumed tax rate on an overall basis
spk_4: but at the the go forward becomes more difficult from challenges
spk_1: he just because of what's going on in with the engine jewish history she was nervous you on us taxes on corporations but also the world that are trying to globally into setting up two income taxes on serving on accurate so what is it difficult for me tell you right what are you just a pr expect expected to be i would say there was no changes in town can i kind of tax structure that over the next two to three years i expected or even come down another point or so because of some other things that we've got going on relative to tax pushing now one episode i think our cat themed daughter very very good job executing on new strategy that we were referencing interceptions he can call we kind of another one or two arrows glimmers are going to do and has been the such to what happens on tax for yeah i appreciate their larry and on cash flow you help us with the he mentioned you expect and substantial working capital drag the here can you quantify that the reason i ask is your cat facts is gonna be below normal this year you'll have a significant working capital trying to trying to project for next year because obviously the before your got into this year's about three hundred next year your your commitment is around for thirty so it implies about one hundred and thirty million of improvement part of that would be working capital presumably no longer being a drag and maybe who knows what will happen with the done next year but i'm just hundred stand the working capital and kappa kappa ex
spk_12: components specifically this year versus potentially next year
spk_1: he mentioned in my time is phenomenal job that or keys and tend to not working capitalism perceptions recycles by which is the primary measures like he has to the cost of inventory is jumping is much more difficult to control whether dark matter is it yours feel a resume and when you look is sheila resonate with is actively doubled in caused over the last mine's that been translated now obviously higher sales prices are suitable balances irishman tories and have that's what creates the heat and the working adult brackets all driven by taught at nine hundred and all mine for management matter for our management a working capital is an incredibly strong so that that's what's causing dragons them were man really easy
spk_13: nothing to do much of each level of to their challenge dragon called thirty five million bucks as preserve star so they can probably double that and a large enough and brow english
spk_14: capitol with the frustrating being brought on camera is were ready able and willing to spend the reality of was impacted on our can expand his beat out of our control is german deliveries delivery people are you running behind on producing equipment
spk_1: now i'm i'm sorry or then oh yeah the tv
spk_15: which i was getting go on to people to do
spk_0: in response to mars question our european bomb in danish and because of code and travel restrictions that has confirmed is coming on the i t side as well so we go we are we went to the year with a plan to spend one hundred eighty hundred seventy million range an hour as the or
spk_1: lucky and twenty million dollars less go again are planning to the future and and we haven't been forged exterior when but it wouldn't be that would be higher because we lack of things we would like agenda and but we're working to what we can get delivered terrific safer and next question comes to mind advice on punjabi repaired bunch of your lines of them good morning everyone it's actually macri are sitting under god you are you doing today i imagine and are you and i am doing well good luck so the given all the moving pieces on a year by year basis for the for the back half of the year as just hoping that you can provide some added detail on he expected waiting our bps between the two remaining quarters for the back out of year and just given a meaningful excel implied some of the comparison issues and then obviously all the pricing a layered in any any help there would be to be great sure that i was younger we had ended his return which going to be better to three of you for in a lot of and just gotta do when did the axes and higher and i would tell you that going in our assumption is that is going to be sort of a normal pattern and in energy three would be stronger link you for but they're not substantially current mean you can basically take and dash differential on bonnaroo has from younger than that you know to do i'd like to skew it a little bit of the region that led a little lot of for and essentially i hear me just gotta there's not an at the time huge difference between the two orders great that's that's really helpful and then now just hoping that we could get the more detail on what the estimated impact from winter storm uri was on the global industrial acting business the hell are you can for anything you can provide from a volume perspective and and also any margin impact as well be great yeah we we i'm in lucky that we had about forty one production he across a number of players that gallup so tactic mama fine she's from an hour six days on few of them were production was just shut down in georgia judge and and sales or from a volume perspective it was about a one point five million dollar him dash we had joke substantially increase utility costs to after a storm and we was another million or so and we had him broken pipes and those the he's from everything is lay down there was another good nine hundred a hundred two hundred thousand and are and is a two point seven million them actual cost now a lot of indirect their that yeah ended up with for your actions going down and time into summoning does this is a market for hundred and he impacted by the he they can get orders and that impacted the we did not you're out all of that we do know that are the gulf coast regions and june volume levels are significantly less than the other areas of the world
spk_0: that gives us cause we're out the as and going forward and and twenty two million pete mansion were really worse you just now starting to see volumes in are filling does this start to pick up and that i'm very good sign for us
spk_16: so we're pretty low as going for but it was about two point seven million
spk_17: okay great a couple that the for me thank you
spk_16: last question comes in line at just been preparing for the valley just underlines right thing
spk_1: are you peek my larry media one big picture question than just a couple specifically not picture outside of new are be are there other parts of your business and industry or packaging or paper packaging where you're sort of unable to me incremental the moon
spk_3: you know supply chains are tyler demand is really robust we are meeting the man for our customers my comment just really really that anybody this new that we don't do business with that would like to do business with in that substrate we just can't determine said
spk_17: or backlog hundred demanded so great but we have actually grown other parts or business because of our reliability now that is forced a lot of overtime and a lotta sixty seven they work weeks but your be a little more severe
spk_3: we're doing a really good job on our customers and and ensuring that were leading their needs and and actually energy actually business and are converting business and not in paper now we're we're actually making some enron that's because of that reliability and it's all related to our customer service source
spk_1: continue improved in spite of a tough to they and environment and moving to the question just to clarify that twenty five million incentive the cool head when that was all all huge q and then they'll be a smaller incremental effect on the second half who that incremental the first half are infinitely year
spk_3: so we haven't yet and do twenty five and was common a on twenty four my checks and combination of last so that was a year over year due to and last year we can we decrease a cruel for incentives and the here we increase be proof for incentives relative to what was he
spk_4: happy and budgeted sound
spk_1: is that and year that twenty five and first second and about the same and channel
spk_18: for the remainder the entire years about fifty two point six million at about two point six million is are the guys are you planning on year over year i'm higher in san
spk_0: okay and then lastly just on the tax rate you you mention that the tax rate like from ghana hundred basis points but that not on the twenty six to thirty that from the twenty fifth to thirty which initially had come down a few hundred eighty points the double tax reform corrupt so it might be
spk_1: it's more than one hundred basis points down from the twenty third just verify oh yeah that a and in that from where we're at now and then we're we're getting to where we will be going forward okay thank you and you think second and as a reminder to relate to ask the question too fast start of another plan on your tongue phone keypad your next question comes to mind of mcluckie with the more capital markets mark in one yeah just the people here will quickly one on the land sales you know the gross price the who's just absolutely exceptional can you talk with us about sort of how the tax leakage looks and you know how you're thinking about the balance of the the portfolio in the land business that you know if we ever get down to a point where just scale in that business as an issue yeah sure march gosh i'll just say oh yes your second question first week we don't have any intention to liquidate any more of our land portfolio you know we and we talked about that in for strategic gosh now the we view it that way and i see houses on our interest rate we like we like the business and can dash we had some unique circumstances and we always talked about right was written pretty hard last year so well we decided to espionage
spk_9: and goes also to the other factor that bro that because it some other attacks playing that we had fun doing relative to timber and she's dead can kinda from from transactions and decade ago we didn't recognize that we and some capital losses that were available for us to
spk_1: use utilize i guide to austria and on until her transactions and so that plane into what we are executed on
spk_0: ended up being more than we thought because as you said and time and we our used for eight years at work out to anything to bankers told us they thought they could get which is obviously good news but as attacks leakage with minimal we and and we were basically a lot to do
spk_1: i utilized other tax laws theory for that we have available to us to limit federal tax we actually small state and local taxes now was it had a lot of put that no fall and i had was a probably perhaps more repeat the medicis can you give us a sense that sort of supplies and and approximate market share on the i did see business or merkel you bought coos the about eleven years ago it was kind of the the number three player in the market and the the dominant guy than miles or and in so you think your strategy was to kind of expand their geographical with brent and and try to pick up there though wondered if you could just give us a sense of how big that businesses right now and sort of where you'd see yourselves these of the the competition finally how rapidly as that market growing over all right now yeah marc so what we got about thirty percent of global market share and i received an i d c reconditioning and worth far behind that to are privately held companies so shows and mouser we stated that that i wrote their we made a capital strategic capital investments with our twenty i mean see both low blow motors around the world war in the process of adding three that is a business
spk_19: our product line and crawling ah the new die single digit so it's the fact is crawling not trying to acquire global basis in our portfolio on think what's really important to his last two years we've either and i've got a joint venture partnerships
spk_1: or strategic partnerships to read conditioners to create a really compelling and like products service we can now that creates a really circularity place for i d c says really important part and right now are getting his poor of our biggest footprint is in iraq we are all in our north american should trade and as i said we're adding a second line into in asia now in china snow on and also of torment you look at a product portfolio and she i t prior to this strategy were over sixty percent of our product next wasn't shields rooms that's moved to fifty percent in our resident days products now or little over twenty four seven so will continue to see that it transfer and switch in terms of portfolio next little bit more into random these products by the sees plastic drones and less less on steel drums okay and that if i have one more be i just wanted blog briefly about he the box board business no one thing is like a i'm assuming that some of it like this that you're experiencing did you are be he is the outcome of having shut down mobileme but i'm just curious he got those two coded the not mills and i and i wonder whether you might you know converged that you are be at one of those mills and whether in the crb business the two remaining know whether they can at risk being can behind behind that technological curb it just seems like with what graphic is doing it kalamazoo we're seeing more and more of the of the sea or be business move the forger near machines that you know can do kind of
spk_0: multi plot eyes and and maybe offer customers
spk_1: improvements and in performance and this way i'm so distant get your thoughts around in a potential conversion then you know where you say stand from to start technological standpoint there denny you are beachside we close the no to machines mills and no bills or for it out and times that was accommodation and the it was a really high cost to for male that little he ever had economic downside back and eighteen and nineteen it was always and that mill edit needed a pretty significant amount of capital so we decided closer to benefit obviously with that it created more line in the rest of our system we do advocate a little and eighty and one of our she or he plans to to run of europeans european we do that now so there's a possibility that that machine could run on them more you are be products in the future my centers order to do so early laced with to few place you are being
spk_20: machines one and and it lasted one and the west coast
spk_0: in there and are operating out fairly consistently now
spk_1: we a nice niches another market so i wouldn't say we compete specifically when the when some of those newer machines will we find our is really high service the girl response to the side think those two machines will stay see or be you know what we do with a teacher regarding our bought for systems work i doing something that really don't have anything you know material in canada lot right now and we are evaluating their okay that's really awful bake good luck in the second half of the year tomorrow next question concert line object staffordshire i think the american security stretch your line of them thanks i guess my line disconnects he to quick garmser clean up for me one peter thinking mention that you are be lead kinds are nine weeks if he could from that are correct and if i got it incorrectly and really more lately what are you saying right now to your lead times as you can back on and you can measure them on the containerboard side and then on kept x recognizing it wasn't your choice if you're going to be twenty million lower the sheer where are you finding you can't spend you mentioned earpieces them that they can entering march question earlier are there any places where that lack of being able install it you wanted is creating stress in your business and therefore journey through important things and we need to focus on for twenty two in terms of what you need to get both that in so that the year progresses like you'd like and should we just similarly expect if you're at one thirty one fifty this year and maybe next year is pushing closer to two hundred as we and to normal plus at on another twenty thank you and good luck and a quarter you're just gonna have gotten you are be york nine leaks ah containerboard is a and nine least adding a machine so the really robust markets and not was backlogs reflect that he attacks george h d like system we church or materially are your operations the way it all ties delay
spk_21: some opportunities for fishing
spk_1: engine as operations and now did not actually going to carry on
spk_22: and the other element
spk_1: these are great plan is where we have the he's my we're going to push by do you live aren't you answering questions or deliveries were still is not backing
spk_0: just change
spk_1: allowing us to improve we work the film and you will end up a result you're probably ah human capital capacity what you can die years so i would expect but we haven't process for much for next year will be back in the hundred and seventy but more talk about that as we going to kind on december call
spk_23: hi thanks for much learn thanks pete good luck in the quarter teaspoon taste searched
spk_1: your final question comes from the line of adam just send the keybank at an alliance of and thanks very much for taking my father just it a two part one larry so when you talk about your reinstated reinstituting guide is based on better visibility is that better visibility because you only have five months left and the fiscal year at this point or because there's much less macro uncertain day and how does that relate to what you might do next year in terms of given guidance of the outset of the fiscal year and the other question on knob they had was i guess given that the eat relative tier initial guidance in the quarter was because of that facts and and tax both of liquor effectively non operational why why pre announced the quarter thank you very much earlier first question out
spk_24: i
spk_0: he will you five months latter
spk_1: asked
spk_0: the economy of play out like the car was going to
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