Sealed Air Corporation (SEE) Earnings Call Transcript & Summary

We're thrilled that you're here again presenting with us. In the audience is Lori Chaitman, who we all know from Sealed Air's Investor Relations effort. Lori, thanks, as always, for what you do. Up on the stage with me today are Jim Sullivan and Ted Doheny from Sealed Air. Jim is Chief Financial Officer of the company, as we all know. Jim, you've been in the role, really over the last...

About 8 months now, George.

And thank you for all you do. Ted Doheny has been CEO of the company since, I guess, very end of 2017, if I recall.

Took over January 2018.

Okay. So I think our first meeting was fourth quarter '17. So I apologize.

You got me early.

What's that?

You got me early.

Okay. Well, trying to add to your tenure and your length of service at Sealed Air. Ted, as you know, has a long track record of helping companies improve in manufacturing and operational excellence, and that is next in terms of what's on his plate with Sealed Air with Reinvent. So again, thank you for being here to talk about what's new at the company.

I guess the first question I had, we've been doing this with most of our presentations is, if you look at 2019, what were some of the learnings? What were some of the surprises? And how do you use that to leverage towards better performance in 2020?

Well, I have to always start with Reinvent. Going into 2019, we hit some headwinds. And you hear headwinds a lot. So being an engineer, try to -- what's the metaphor of a headwind. You have winds coming at you, and here I am trying to turn around a battleship in a bathtub. So using those headwinds to how do we go faster with reinventing the company? And reinventing the company from everything -- and people ask me, is it restructuring? And I'm quick to correct, restructuring is part of what we're doing, but reinventing everything. So we use that as a fuel because we hit a -- we were short on our revenues, but how can we still drive our earnings, how could we improve our profitability, how can we improve our productivity, and that worked out pretty well. The other surprises along the way, what was going on with different markets and how quickly could we move. We had some industrial issues. We had issues with our portfolios in various product lines. We ran into African swine fever, et cetera, et cetera, continually how do we react to those issues in the market, while we're still changing the company. And I feel pretty good about that what happened in 2019 is actually going to help us accelerate into 2020, which will probably be one of your questions, what are you worried about in 2020, as it's already started.

Well, yes. But from that managing what might have been a great number of headwinds and obstacles in 2019, what is it that gives you confidence? What are you leveraging for '20? Or is it just, hey, listen, George, we managed it and so we're confident that whatever comes our way in '20, we can handle and then some.

Yes, I think that what happened with what we did really well is, I think, with Reinvent is how we changed our productivity, what we did with our facilities. I think when I first met with you, you asked me what was it like when you visit the facilities around the world. And we put some programs and plans in place to work on our productivity. Some long-term plans, we increased our capital investment into automation. But the short term, I was really pleased with what we were able to do on the productivity around the world. The other major change was how we started acting as one company. Looking at our business not by Food Care or Product Care, and at the time when I did start, Diversey was just leaving, how do we really act as one company? And I think we've made great progress on that.

Jim, quick question for you. You're the relative newcomer here, but obviously you've had a long career in manufacturing businesses. So what strikes you as the opportunity set at Sealed Air that might be different from other businesses that you've seen?

Well, I do think when I first came here, I was looking at the margin of the business, and it was a pretty good margin. And I kind of asked myself, is it possible to significantly improve the margin? And I came in with a little skepticism. And I've been through a lot of transformations over my career. And so I've seen good ones, and I've seen not so good ones. And so as a finance person, I tend to approach things maybe with a little bit of skepticism. To being with the company a pretty short period of time, I was very impressed with the level of detail and the governance around the various underlying processes that are being reinvented. Pretty different than what I've experienced in my career. So over time, being here 8 months, I've become a real believer in what's going on at the company. Clearly, as the company entered 2019, the expectation was to deliver benefits, but not to the level that we achieved. We really got a lot of momentum as we crossed the year. And fortunately, we did because our markets were not moving with us, in particular in Product Care where we've seen a pretty difficult manufacturing economic environment. And so we powered through that, and we have great momentum as we head into 2020. If you look at the benefits we expect incremental to '19, it's over $100 million, it's $110 million in '20. And 50% of that is already action, meaning we've already taken the action. We just need to get the full year benefit of it, the flow-through, and the remainder is out there. So a lot of really good work going on. I would say a significant amount of work is in our direct margin, structurally improving how we buy our materials, how we transfer our materials, how we value price to the market, really analytically approaching that in a smart way. And to me, it appears to be a very structural improvement, not something that will come and go. So I'm optimistic as we go into '20. We're in another difficult year from a top line perspective, but I feel like we've got the engine of Reinvent, which really, at the end of the day, is going to be our business system that will drive productivity and allow us to achieve margin expansion even in a tough top line environment. And I will say some of the process improvements that succeeded on the productivity side of the house, we're translating to how do we innovate and how do we go to the market, and looking at different ways to do that to find growth in a challenging situation. So I'm impressed with what I've seen when I came in. I heard that the innovation side of the business was not moving at a good clip. And I see that changing now.

That's great. Thank you for that. I want to dig a little bit further into Reinvent. So realizing it's probably going to be both to the question, do you -- is Reinvent more of an offensive strategy, Ted, as you think about it? Or is it more of a defensive strategy? You mentioned, it's been a tough top line environment, not just this year, really over the last few years, and you need something to generate a return to your equity holders. So how should we think about it, recognizing it's probably going to be both?

Yes. The -- and I use this picture here to help, and we've actually unpacked it, as Jim said. There's a lot of analysis and analytics behind what we're doing. We use our 4P'S and I use the S there because we have to talk about sustainability. So it is a good business. And the model that I used when I first came in, using a good to great model. And the reason why I chose the Reinvent word is to bring the people along with us. This is a very good business, iconic brands: Bubble Wrap, Cryovac. And so the first thing we looked at was the performance of the business. So it was, as Jim said coming in, I felt the same way, this is a fairly profitable business, but was it growing? Were we getting the margins we could? And through the analytics, we said, "Boy, this business could even be more profitable than where it is today." So we set those margin targets, we spent a lot of time on the metrics, we changed the metrics on management, et cetera. So that was more of an offensive strategy, how can we take this really good business and make it great. But whenever you do that, you find some things, you got to defend where you're going. And we talked about some of our markets are moving. And if you're not moving, the market will take over, especially e-commerce market, what's going on with sustainability. So we had to turn this to the offensive. For instance, sustainability, which is on the bottom -- we're now, we believe that sustainability can fuel our growth. If you look at our product strategies now, we always believed we had the best products, but the pricing was an issue. So we had to change that. Let's make it the right price. And if our price is too high, let's go find savings in the customers. Also, if our cost is wrong, let's go at it, and let's go at it aggressively. And then with each one of those, let's make it sustainable. Let's not wait for the market. Right now, people are saying millennials aren't going to pay for sustainable products. I don't know. We're going to try to get as much as we can for new sustainable products, but we're going to take the cost out and assume that we won't get in the marketplace. But then the other -- the defensive strategy that's in there is really -- and Jim alluded to it, is really the process change to the business. This process excellence across the whole company, that's what I've been impressed with, at how quickly we've moved and actually get more excited about more to come. And that's really, for 2020, the engine that we're trying to really move is our growth engine with Reinvent in the toughest market we've seen. But adversity defines us, so we're on high definition. We're going to use this engine to grow.

So one question I had and maybe the premise coming from this is incorrect, so I would appreciate any commentary in that regard as well. But you've had this 40% incremental margin target, my phrasing, as part of Reinvent, and frankly, part of your -- the way you run businesses coming into Sealed Air. Why is 40% the right number? Are there growth opportunities that you're not availing yourself of that would be at a 35% margin or incremental margin of 30%? So help me understand whether that 40% target is, in any way, creating some obstacle to growth?

No, it's a great question because I've been asked that before, are you setting the margins too high? Are you walking away from growth? I guarantee you, if you ask our team, and Jim's here as my witness, there is no growth that we are not going after. So it's not an issue that we're pricing ourselves away. The issue on the 40%, when we analyzed this business, we compare it to where we want to take it is to world-class performance. We looked at businesses that were similar in structure. We analyzed our whole portfolio and we looked at what we do really well, that was the high end of where we could go with the performance. And we have some pockets of our business right now that are performing at that level. But that was the target of what we should be. Now with the restructuring in there, we looked at that. We're well over that 40% target. But we got to get the growth. The issue, though, you had a great question, as we add new businesses to our portfolio, that's going to be really tough. We just bought a business with APS. APS right now is a 14% operating profit business. We've analyzed that very quickly within 5 months, we've moved it. It's having growth issues. But we feel that we could definitely leverage that business north of 30%. So is it 30% -- is it 40%? That's what the target is right now post restructuring. Where I came from, in different businesses, once you get over 20% operating profit, you have to have an incremental margin above where you are. Otherwise, you will degrade your margins. So that was the analytics of why we chose that number, and we believe it's doable.

George, the only thing I would add on that is, since I've been here, I see a lot of power with converting ourselves from just a material supplier to a solution provider as where Ted's driving the business to provide our customers automation, equipment, science and service, material science and service. And I think that solution and what that brings to the customer in terms of cost savings is significant. And so as Ted said, we don't go in on price. We go in, how can we save our customers money? And then we price it the right way. And we feel structurally that, that incremental is available to us. We talked this morning, we think maybe with some innovations that we have going on in adjacent markets, that maybe we want to invest a little bit more in those adjacencies. And for some period of time, it's not like we're going to be perfectly 40% for every dollar of sales from here forward. But that's kind of our targeted range. And we're going to be smart about the investment side of things because we do want to grow the business.

And if you don't shoot for 40%, pretty soon you'll wind up at 15%. So anyway.

Well, and actually Jim highlighted a good point when Lori put this slide up here. The people think of us as a film company or the Bubble Wrap company. What we're really trying to highlight where the market is going in automation. That's what our customers are looking for. They can't get labor, they've got to take their costs down. And if they want to be sustainable, they've got to do it. They've got to get their cost structure down. So if you look at this slide here, very different than what you would have seen 10 years ago from Sealed Air. You see the equipment, and that's what's driving. And I think, George, you might have asked me early in my career, do you believe in the Razor/Razorblade model? And you saw me just cringe. Coming from an equipment company, the equipment is special for us. That is where we're really taking out some significant cost and giving tremendous benefits to our customers that pulls through the materials. And the glue to all this is service. And my takeaway from being with the company 2 years, this is really a service company, this is a technology company. And a service and technology company shouldn't have a problem with 40% incremental.

Okay. Thank you for that. Let's pivot on that then. Then let's talk about how some of these newer products are doing. You've talked a lot about StealthWrap, and that is a system, it's not just a product. You've talked about I-Pack. Help us understand how your systems and, for that matter, the packaging consumable, whatever phrase you prefer, is doing. And then relatedly, we'll switch to food. A few years ago, Darfresh was front and center in terms of discussions. Optidur was a new product, tell us how those are doing. You can sort of say, okay, we're generating -- if 100 was the index 2 years ago, we're at 110 or 95 or what have you. Is there a way to quantify the growth you're seeing in your new products, both in Product Care and in Food Care?

Okay. I'll try to get that. And Jim will plug in if I miss how you were thinking of that. But if you look at this picture again of where we are, and also this is a picture of where you're going. So let's look at -- on the right, where you see StealthWrap and you see it next to the equipment. What is StealthWrap doing for our customers? First of all, I'm trying to simplify our names, which it takes too long to tell a customer what this means. And I was taught early in my career, if you confuse a customer, they go to price. StealthWrap is basically just a simple way to protect a package. So you don't know what's inside because one of the huge issues in the marketplace is theft. So how can we quickly package with minimal material at high velocity of protecting the equipment. So how is that doing? It's doing well. The issue there, though, was connecting it to our materials. So we've done a lot of work, StealthWrap is using our materials and will use our materials. And I say that sometimes in the past, some of our equipment wasn't using our materials. So quantifying that -- the growth area, though, if you think of Bubble Wrap, which is a stagnant product that -- it's shipping air, one of our highest growth products is Bubble Wrap on-demand. And that's a piece of equipment that we put at a customer's site and you ship it in high-density rolls and you create Bubble Wrap on the spot. That is a high-growth area and it actually brings in the sustainability story. We are now bringing recycled content to that. So going very well. Now going into the food side -- I'm sorry.

Yes. So Ted, just if we could -- as much as possible, and I realize you can't share perhaps too much, but with some of the new systems, whether it's StealthWrap or Bubble Wrap on-demand, are those growing 2% a year? 12% a year? Flat right now because the industrial...

The Bubble Wrap on-demand is high single digit.

Okay.

And I believe we could even take that higher despite the tough markets because it's solving so many issues for our customers. So we got some product issues. We got to still work on the sustainability side of that. But that should be double-digit growth in a tough market. Well, and actually, side-by-side, you see it with our paper systems. Our paper system, small number is growing double-digit for us. Now to the food side?

And StealthWrap is kind of still...

StealthWrap is following the industrial markets.

Got it. Okay. To food.

So -- and that's -- it's a good question, George, because if you're doing what the markets are doing, you're going to follow the markets. So that's why we're trying to change our innovation model to do more than the market so we can grow faster than market. But back to the food. So you talked about Darfresh. Actually, in my travels this week, I found out where the -- history where the Darfresh name came from. So since you're a historian of Sealed Air, I'll share that later for you. So where we're going with the fresh food is the growth in the meat, we do quite well. As the markets move with meat, we move with fresh red meat; with the proteins, with pork and chicken. Well, and I mentioned pork, oops, we got an issue now. So the pork has been hugely affected by the African swine fever. So the food business is growing at the rates of the markets it serves. For us to beat the market, we got to bring new products in. We've got to go to the adjacent markets, which you see up there with our FlexPrep. And the FlexPrep is now going into the adjacent markets of rigid containers. And that's for condiments that are in fast food restaurants. Feel good about that and the growth actually this year. Why? The equipment orders have started. It's another part of our model that we need to change because when the equipment business starts coming up, then we get a better signal of what's going on with the business. That FlexPrep business for us will be a growth business for us this year. Why do we know that? The orders have started. It takes about 3 years to get the conversion through, so feel good about that on the equipment side. The real issue on the growth for Darfresh, and this is really being driven hard in Europe, is the sustainability and the recycled capability, and we're moving very quickly on that. But that sometimes is a cannibalistic growth because you're having to change your current product.

I think the other growth opportunity we have is the company, I think, was a leader in switching the Brazilian market, the food market, from an unpackaged to a packaged market for food safety, for freshness reasons. And as we look at what's happened in that market over the past 15 to 20 years, we think China is the next huge opportunity for the company because it's largely an unpackaged market where meats and proteins are hanging out there and subject to the elements. And as food safety becomes more and more front and center, as portion-controlled packaging becomes more desired by the consumer, these are real positive secular trends that will impact the business here over the coming years.

Okay. Lori gave the picture to give a better answer to your Darfresh question. Thank you, Lori. The issue here. This is the Darfresh solution with the equipment. But the one beneath it that we're talking more about now because we've got the developments more advanced, is going after fresh fish. Now we've been in fish for a while. We've done fresh fish for a while, but it's really looking at holistically for the solution with the distribution footprint. And really, that first issue of the 20-day shelf life is the big deal. So that's a package in a package. And so we're working very closely, but -- and how we have to market this, not only do we deal with the grocery stores, we're dealing all the way with the processors, with the fisheries, with the distributors. So this is a very complex supply chain, but the numbers are compelling. And we think this is a growth opportunity for us.

Thank you for that. Any questions for Sealed Air on new products, commercial opportunities, the discussion to date. [ Ron ], quick one.

Sure. On the e-commerce world, there's a lot of attention being paid to simplifying the operations in fulfillment centers and eliminating a lot of the manual preparation of items before they're boxed and shipped. We see a lot of work here on fill and dunnage, but have you given thought, I know you're working on this idea of automated prep.

Great question. Here's -- it was a big part of our acquisition that we made with Automated Packaging Systems. And as you see the numbers on the right, it's pretty compelling. One of their leading products is Autobag. And the product down below is the high-speed SidePouch automated system. And so the numbers, and if you look at the fulfillment center, pretty compelling. We led the mailer, the hundreds of millions of mailers out there. We've developed that mailer a big part of our business. But over time, you pay X amount, you put 100 of those in a box, you ship that box to mailers to a fulfillment center and a person can load, say, 5 or 6 a minute. So as they're driving this huge drive for automation, how can we load automatically those pouches and actually create the mailer on-demand, just like we do Bubble Wrap on the demand at the work cell, workstation. So yes, developing that -- and it ties to where I was going earlier, why automation -- and that is the key word for our customers, automation. How can they do more with less by investing and working smarter, which is the same mantra that we use internally. So bring our automated systems there. We're doing the same thing in food, the major players, and that's the power of our business. We are at the table with the majors. So we're dealing with the major food processors on how they automate the food into the package, into the bag. And one of my favorite projects, you don't need a box. So even with the mailers, with the hundreds of millions of mailers, we're working on an automated system that we can take the price down significantly and the cost and make it sustainable and do it without a box. And that's sustainability, getting rid of the box in the food plant, getting rid of the box is a big deal because they don't want the organic material next to food. So this is where we're moving and just spending time with our customers, how can we help? What -- can we solve those problems? And then moving that portfolio to take care of it. And most of the customers are asking us about automation in areas where we don't have the equipment. So that's our divining rod, what do we need? And that's kind of why we're here with this acquisition. We need this equipment, and this is how we're going to sell more materials.

Ted, I want to come back to sustainability for a minute. So you mentioned that you think sustainability is an accelerator of demand. So I just want to make sure I understood that and what you thought the increment could be. The 2 related questions to whether it is or isn't. On Darfresh, what I heard was sustainability is helping kind of the new Darfresh, but you're cannibalizing old Darfresh, which is maybe if we actually could see the numbers relative to the product line, so you can't show it. The growth isn't maybe as quick as you'd like. And certainly, in e-commerce, when I went out to PACK EXPO, the sort of the fiber-based packaging companies were using sustainability as an angle to market against poly-based protective packaging materials. So is sustainability really an accelerator at this juncture. And when would we see it more materially be that?

Well, I think is -- I gave you that visualization of this battleship turning in the bathtub, so it's churning. I'm just telling you, there is no ambiguity internally. We're going to make this sustainable. So the reason for telling you that we're going to have to fuel our growth is we're bringing sustainability into all our products. The churn, which you're looking for a number, is we're going to have to make our existing products sustainable, so that could be cannibalizing what we have, not can be -- it will because we're a leader in what we do. The real growth is when we get to ask the customers the questions, what is your most efficient way to do what you do? And part of sustainability is waste. Part of sustainability is in the packaging. Do you need the box? Can the box go away? As part of sustainability, do we have products now that are fully recycled that could do things much more efficiently than you may be doing with a rigid container, where I gave you the FlexPrep example? That's a major sustainability play, eliminating a rigid container. But we got to have that full conversation and chase it. In your report, and shout out for George and for BofA, your sustainability report is fantastic. I've become a -- all week, that's all I do. I was at the Alliance to End Plastic Waste on Monday, I was at the National Geographic meeting. This is a big deal. But if I use the science, people aren't going to listen. The science says that plastics versus paper is hugely more efficient, lower cost, and actually on a carbon footprint, dramatically lower. When you throw a plastic into a landfill, it's a rock. You will not win that debate in that argument. We have to take care of it. And so, George, part of the sustainability on fueling our growth, we have in our site. But what I'm telling in our team, you go figure it out. It's kind of like signing the pledge, we're going to go make that happen. I gave them the Kennedy speech in 1962, "Don't tell me it's impossible, tell me it's improbable." But I tell you, our customers love it. And we're having major sustainability innovation meetings together at our Packforum. Have you been to the one in Charlotte?

Not in a while.

You need to come visit us.

I'm going next week.

You need to come. And by the way, we have -- we used to do these Packforums in trade shows. What are trade shows for? So our competitors can crawl all over what we're doing. We have now created these innovation centers on our -- at our major manufacturing facilities. So we have virtual centers. We create the packaging on the spot. And we show how we're going to make it sustainable. And so we -- this is going to happen, and we're going to do this. And sustainability is going to be fueling our growth. As we're churning this year, you want a number, is it 1%...

I want a big number. I want 12% growth.

Well, it's going to beat that.

You heard that right here. No, just kidding.

It's going to -- no, it's going to beat it. But I've got to be real with you because I have my numbers friend here said, Ted, George got a good memory, he'll ask you next quarter. So it's going to be our fuel as we get through all the noise. And we have currency going against this, we got the coronavirus, all this stuff, but this will be fuel for our growth. And we're putting our scientists on it that are doing some amazing things. We gave them the target of Bubble Wrap, the circular economy. So we said, fix it. We do 1 billion pounds of resin. Now operationally efficient. The team was telling me we're 90% efficient. So you take 1 billion pounds of resin. That means 100 million of waste. Why give that to a landfill? That waste is now the fuel for recycled Bubble Wrap. We can do it. We can have these mini circular -- we're working with customers, getting their waste back into scrap. Can we create our own circular economy, not waiting for a government, not waiting for someone else? We can do it. We can make our business better. We can make more money. We can grow, not double-digit yet, but you know what it's the right thing to do and we're doing it.

Understood. Should we be expecting that sustainability is net accretive to your results as much as you can comment by '21, by '22? Or is it really too hard to call at this juncture? Seems like it's kind of a net neutral to me right now.

Jim won't want me to tell you, but my ambition is by '20 -- Reinvent where the targets are in 2021. So but every time I say that, who knows what you wake up into next day, what we're dealing with. But I would say, I would be disappointed. I gave you the Bubble Wrap example. We gave them 18 months. They got the project designed. I was supposed to go on Friday to our U.S. facility. It's going to be 90% of our mailers from recycled content. They got that done in 9 months.

So -- okay. So hopefully '21, but...

Yes.

Asterisk. Understood.

But one other thing is in our new product development to be driving as well.

Yes. Okay. A couple of questions. One, around organization and then just want, as we're wrapping up, to see if there's anything public domain you'd want us to be mindful of just in terms of cadence of earnings. So let's deal with that first. Anything that you would want us to be mindful of on the outlook cadence. Guidance was not that long ago. So I wouldn't expect there to be any changes, any new things out of coronavirus that are...

I'll just -- no, we're -- we just did our earnings. So we were pretty descriptive on what we're seeing in the first quarter. You're talking to everybody else, the coronavirus is real. It's affecting facilities around the world, and it's showing up in the slowdown in the marketplace because people aren't moving. I was just on the phone with our Italian operations this morning. We have 2 major facilities in Milan. Our North Milan, the outbreak that's been quarantined south, is 30-kilometer south. We're 65 Northeast. Checked with our people there. We've been -- we had an emergency response over the weekend, and we check daily. I checked with them this morning. We have not missed a beat on our operations. The facilities are running. People are safe. But there's fear and the fear is real, and it's showing up, and these are some of the behaviors. We've had some orders because people wanted extra inventory. We've had orders slow down because of some supply chain issues. So go back to your question. We gave earnings, we gave you what we thought, but there's no question there's an impact right now on us, global economy and every day. I mean look at the markets, one day, it's fixed. The next day, it changes. But it's real. I think, though, it helps us with our customers because those phone calls, because if we go back to our purpose statement, we're in the business to protect. As Jim said, well, the meat that's hanging on a hook in China, that's what they call the wet market, that needs to be protected. We can help.

Understood. My last question as we're wrapping up, and maybe we're connecting things that really are not connected or related, but if we look back over the last 15 months, and certainly, you've been operating in an environment that's not been the most favorable, either from industrial packaging or in food, obviously, with what was happening with China and pork and the need to get protein to the market. There have been times where you've had some sort of one-off volume hits. Product Care was end of '18, Food was end of '19. Is the organization, as you see it, is it performing as nimbly as you would like? One question I get is, is Sealed Air so focused right now on Reinvent and getting the cost and the margins that maybe it's missing a little bit in terms of new products and commerciality. How would you rebut that question, that point?

No.

Okay.

No. And you're welcome to come and see us and Jim, and we're both from Missouri, so Jim will tell you exactly. The intensity on Reinvent, especially on the growth side with innovation is moving, I think, faster than it ever had.

Okay.

We have issues, but it's how quickly we can deal with those issues. That's the test. And as things are moving -- as I gave you that Bubble Wrap example on mailers. We lost business there on the mailers. So what do you do? You complain about it? You cry about it? No. You fix it. And that was fixed pretty quickly. And by the way, there's more problems than you even know about. You said the third -- fourth quarter in Food, I wasn't really happy with the second quarter. We had major issues that are operational. But we're fixing them and moving and Reinvent's become -- it's become a real rally cry internally and a drug and people are looking at it. And it's not about restructuring, it's about the pride of this business that Cryovac created, the special packaging for fresh red meat. Bubble Wrap created this special packaging. We just got to reinvent it and get it done faster, and that's the energy that we're trying to unleash. So my short answer is no. I can give you a much longer answer to prove it otherwise, but the proofs can be in the numbers in the future, and we got to make that happen.

Understood. Ted, Jim, thank you very much. Please join me, everybody, in thanking Sealed Air for a great presentation.