Silgan Holdings Inc.

Thank you for joining the Silgan Holdings first quarter 2020 earnings results conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Tim Ulmer, Vice President, Finance and Treasurer. Please go ahead.

Thank you. Joining me from the company today, I have Tony Allitt, Chairman and CEO, Adam Greenlee, President and COO, and Bob Lewis, EVP and CFO. Before we begin the call today, we would like to make it clear that certain statements made today on this conference call may be forward-looking statements. These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the company, and therefore involve a number of uncertainties and risks, including, but not limited to, those described in the company's annual report on Form 10-K for 2019 and other filings with the SEC. Therefore, the actual results of operations or financial conditions of the company could differ materially from those expressed or implied in the forward-looking statements. With that, I'll turn it over to Tony.

Thank you, Kim. Thank you all for being with us today. We'd like to start by offering our sincere hope that you are all well and successfully weathering this unprecedented health and economic crisis. It's a bit strange for us today to be telling you how well our company is doing in the middle of these trying times. However, we're consoled by the knowledge that so many of our products are desperately needed in these times and proud of the work our employees have done to ensure our continued delivery on these demands. As indicated in our press release, despite having factories in many hot spots around the world, We continue to run all of our facilities and have seen record output in many. We are committed to continue to keep our employees safe, to deliver for our customers and our communities, and to continue to stay proactively ahead of this ever-changing crisis. We are proud to have been designated as an essential business in all of the geographies in which we operate, including by the Department of Homeland Security. We took several proactive steps in light of the pandemic during the quarter. Fortunately, as we later learned, the when you responded was almost as important as the how you responded. We were characteristically conservative in our COVID-19 actions. As the initial outbreak was impacting China in January and into February, we began sharing our employee distancing and facility sanitizing protocols across our businesses. Then as contaminations began to be reported in Western markets, we severely restricted non-Silgan visitation to any of our locations, and banned international travel weeks before Western governments began to do so. Later, as the credit markets began to tighten, we proactively drew upon our revolving credit facility, even though we have no near-term maturity. As a result, our businesses are running well. We have significant liquidity and believe we're in a good position to weather the current storm. Through the dedication of our employees, we are truly Sylvan Strong. With that said, I'll make a few comments about the first quarter and our thoughts about the remainder of the year. Bob will then provide some further details, and then Bob, Adam, and I will be pleased to take any questions. As you've seen in this morning's press release, we reported earnings of 57 cents per diluted share, well ahead of our expectations and significantly better than the previous record first quarter 2019 of 46 cents per diluted share. Each of our businesses posted record first quarter volume gains and strong segment income. While the consumer pantry stocking in March did have a positive impact on each of our businesses, it is important to note our sales lift from these purchases lags the retail outlet sales, impacting us only when our customers begin rebuilding depleted stock levels. Therefore, more of the impact of the initial consumer buying is expected to occur in the first part of our second quarter, which we are currently experiencing in April. Each of our businesses also operated very well despite the challenges of the COVID-19 situation, resulting in strong profit levels for each. We did incur some additional costs associated with COVID-19, including one-time incentive payments to our plant employees. While there are many uncertainties for the remainder of this year, We have some indication of demand levels at this stage for many of our core products and our ability to meet those needs at this point. As a result, we have provided guidance of 55 cents to 70 cents in the first quarter as compared to 55 cents in the second quarter of 2019. This increase, nearly 14% at midpoint, reflects the current demand we're seeing in many of our products due to the replenishment of products purchased during the pantry stuffing in March in most Western markets. This demand is particularly strong for food, beverage, and consumer health products such as soap and sanitizer bottles and dispensing systems. Certain other products generally not intended for stay-at-home use such as gallon food cans for restaurants, sports drinks, and some beauty products will likely see volume decline. This unprecedented shift in demand is one of the reasons for the larger than normal range in our estimates. For the full year, we've raised our guidance from $2.28 to $2.38 to $2.35 to $2.50 per diluted share. This estimate reflects an improved first quarter of the year and considers that some of that volume may have been temporary pantry stocking that will reduce demand in later periods. However, we do believe that the increase in demand for some of our products, such as food and consumer health products for in-home use, should experience a sustained increase in volume as more people continue to eat and entertain in small groups in their homes. Additionally, many new or returning customers are using our product format, such as food cans, and we're working hard to help them understand the nutritional benefits and convenience for cooking so they feel comfortable staying with these products once this crisis has passed. With that, I'll turn it over to Bob.