Magnera Corporation

Good day, and thank you for standing by. Welcome to the McNair Q2 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Robert Wildminster, please go ahead.

Thank you, operator, and thank you, everyone, for joining Magnera's second fiscal quarter 2025 earnings call. Joining me, I have Magnera's chief executive officer, Kurt Bagley, and chief financial officer, Jim Till. Following our prepared remarks, we will have a question and answer session. To allow everyone the opportunity to participate, we ask that you limit yourself to one question with a brief follow-up, then fall back into the queue for any additional questions. A few things to note before handing over the call. On our website at magnera.com, you can find today's press release and earnings call presentation under Investor Relations. You can also go directly to ir.magnera.com to review the investor presentation's from our recent conference attendance. During the month of February, we attended Barclays Industrial Select Conference, JP Morgan's Leverage Finance Conference, and Bank of America's Global Agriculture and Materials Conference. As referenced on slide two during the call, we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measures in our earnings press release and in the appendix of the presentation available on our website. Additionally, a reminder that we will make certain forward-looking statements. These statements are made based upon management's expectations and beliefs concerning future events impacting the company, and therefore are subject to risks and uncertainties. Actual results or outcomes may differ materially from those expressed or implied in our forward-looking statements. Some factors that could cause the results or outcomes to differ are in the company's latest SEC filings and our news releases. These statements speak only as of today, and we undertake no obligation to update them. I will now turn the call over to Magnera's CEO, Kurt Bagley.

Thank you, Robert. Good morning, everyone, and thank you for joining us. We're excited to share our second quarter results and provide an update on the momentum we're building across the organization as a new company. I'll begin with an overview of our business, highlight new innovative product launches, summarize our key takeaways for the quarter, provide an update on synergy realization, and discuss the potential impact of tariffs and ongoing market uncertainty before I turn the call over to Jim for our financial update. Slides five and six. provide a reminder of Magnera's distinguished position as a global leader in material solutions, with a growth engine focused on product differentiation for premium applications that delight end users. Our strategic market positioning is complemented by the widest array of technology platforms in our personal care and consumer solutions categories relative to our peer set. We leverage our research and development centers of excellence by collaborating with our customers and suppliers to address the ever-changing demands of the consumer. Our manufacturing footprint effectively serves our global CPG and regional customers with business continuity options. As the circular economy remains a key focus, our local supply chain is more effective for our customers and more beneficial for the environment. Our team continues to identify actions that will further optimize our footprint to improve efficiency and increase value to our customers, given Magnera's scale. Slides 7 through 9 are recent examples of product launches that further demonstrate our ability to pivot our portfolio to high-end applications in the face of dynamic market conditions. We are proud to have been acknowledged and awarded the most innovative building material at the 2025 International Builders Show. Our new TYPAR-branded clear acrylic flashing solution was recognized for builder efficiency by streamlining window installation and inspection. It is the seventh new product line extension in the past three years for our trusted TYPAR product line and is why we maintain a top position in the North American infrastructure market. In addition to gaining new customers, we view the market's short housing position in the United States and Canada to be a future tailwind for organic growth. The next product spotlight addresses a growing consumer preference of soft touch and feel for premium incontinence applications. Our new Chemisoft and Ultrasoft products were developed through material science and our deep understanding of required performance characteristics. The team successfully combined innovative patterns with proprietary material chemistry to deliver unparalleled drapability and superior barrier properties. These premium products provide twice the softness than the standard offering. By manufacturing these products with a variety of raw materials and basis weights, we are able to reduce the production carbon footprint. Now shifting to our second quarter performance and an update on synergies and tariffs. Energy inflation in Europe proved to be a significant headwind, with natural gas and electricity costs higher than the prior March quarter. In addition, we experienced cost increases in primary raw materials such as resin and cellulose fibers. We intend to recover these increases in the second half through our price pass-through mechanisms and productivity. As the quarter progressed, we experienced inconsistent order patterns from our customers due to a growing level of market uncertainty. Many of our largest customers adopted a wait-and-see approach, as reflected in the market consumption data for the quarter. Given these recent order trends, which are inconsistent with our historic order patterns, we are working closely with our customers. Should our customers decide to reduce their own inventories due to a drop in consumption, this could impact our sales. While we don't anticipate the current market dynamics to become permanent, we are prepared to execute the required actions which could include idling more capacity or initiating footprint rationalization in response to what we deem our new longer-term market realities. Moving now to a synergy update on slide 12. We remain committed to our $55 million net synergies over three years and have progressed from the assessment stage to the implementation across our three major pillars. We are effectively streamlining our organization and optimizing our SG&A structure by addressing redundancies in functional areas to enable a more responsive and agile workforce. Our procurement and operational teams have made great progress in executing alternate raw material qualifications, and we are ramping up efforts to optimize our production pipeline while we harmonize warehouse space and rationalize capacity for productivity gains. All actions are grounded by our unwavering commitment to safety of our employees and supply surety for our customers. Our team is working diligently to build flexibility in our supply base with procurement being a competitive strength for the company. We expect procurement and operations to deliver value this year and further accelerate cost reductions in 2026. Regarding tariffs, we broadly view the impact as being in line with what our CPG customers are communicating related to consumption of the essential everyday use products we provide. As it relates to our cost of goods sold, we view the potential impacts to be limited as the majority of our raw materials are sourced and shipped within the geography of our production sites. We benefit from being a local supplier to our customers with a global footprint that provides business continuity plans in uncertain times. We are tracking tariff communications and mindful of supply chain rebalancing efforts and the potential for short-term supply repositioning as markets react to the implemented tariff measures. As the market landscape evolves, we will work toward offsetting cost increases through pricing actions. As I noted, we are prepared to take additional action to optimize our business to match consumer demand realities. For Magnera, we view this time of uncertainty as an opportunity to reinforce the core fundamentals that will deliver long-term value creation for our shareholders. As we realize synergies and gain market share with our highly differentiated technology platforms, we will leverage our scale and innovative product offerings to deliver value and support customer growth. Now, I will turn the call over to Jim, who will review Magnera's financial results. Jim?