Good morning, ladies and gentlemen, and welcome to the Platform Specialty Products Corporation Second Quarter 2017 Results Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I'll now turn the call over to Carey Dorman, Senior Director of Corporate Development. Please go ahead.

Good morning, and thank you for participating on our second quarter 2017 earnings call. Joining me this morning are our CEO, Rakesh Sachdev; CFO, John Connolly; Ben Gliklich, our EVP of Operation and Strategy; Scot Benson, the President of Performance Solutions; and Diego Lopez Casanello, the President of Agricultural Solutions. Our Chairman, Martin Franklin, is also on the line. Please note that in accordance with Regulation FD, or Fair Disclosure, we are webcasting this conference call. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Platform is strictly prohibited. Before we begin, please take note of Platform's cautionary statement regarding forward-looking statements in the earnings release and the supplemental slides issued and posted today in connection with this conference call. Some of the statements made today will be considered forward-looking. All forward-looking statements are based on currently available information, and Platform's reported results could differ materially from those predicted. Platform undertakes no obligation to update such statements as a result of new information, future events or otherwise. Please refer to Platform's SEC filings for a more detailed description of the risk factors that may affect Platform's results. Please note that in the earnings release and the supplemental slides, Platform has provided financial information that has not been prepared in accordance with U.S. GAAP. In accordance with Regulation G, Platform is providing reconciliations of these non-GAAP measures to comparable GAAP financial measures in both the press release and the supplemental slides, which can be found on Platform's website at www.platformspecialtyproducts.com in the Investor Relations section under Events and Presentation. As a reminder, for the purposes of this call, Platform will, in some cases, be comparing the same period in 2017 and 2016 on a constant currency basis as management believes that these figures provide a better comparison and understanding of the underlying business results for its operations. Please review the press release and the web deck for further information. It's now my pleasure to introduce Rakesh Sachdev, Platform's CEO, for opening remarks. Rakesh?

Thank you, Carey, and good morning, everyone. Platform continued its positive momentum with another solid quarter of results in the second quarter. Overall, the combined business achieved organic sales growth of 2% and realized a constant currency adjusted EBITDA margin improvement of over 100 basis points. Our Performance Solutions segment was the primary driver of the organic sales growth in this quarter as organic sales in the Industrial business grew high-single digits and in electronics assembly business, sales grew [Audio Gap] the low teens on a percentage basis. In our Agricultural Solutions segment, we also saw modest organic sales growth in all regions, excluding EMEA, where a slow season in parts of Eastern Europe and a change in our selling strategy in West Africa weighed on otherwise solid organic sales results from Central and Southern Europe. From an earnings perspective, we continue to execute on our synergy plans in Performance Solutions and benefited from product mix improvements in Ag, driven by organic sales growth in higher margin geographies and continued traction with our biosolutions products. Our outlook for the second half of the year remains largely unchanged. We are encouraged with our overall growth opportunities, but we're also aware of certain macro factors like softening U.S. auto production, more challenging electronic comps and continued low commodity prices for certain crops. In light of our solid performance for the first half and the better visibility it gives us for the full year, we are raising the low-end of our full year 2017 adjusted EBITDA range up by $10 million for a new adjusted EBITDA guidance range of $810 million to $830 million. Slide 4 shows an overview of the financial performance this quarter. We reported second quarter 2017 net sales of $941 million and adjusted EBITDA of $205 million, representing an…

Thanks, Rakesh, and good morning, everyone. I'm now on Slide 7 where I'll talk briefly about our performance and expectations for cash flow and the balance sheet. Platform had a strong quarter from a cash perspective generating approximately $88 million of free cash flow in the quarter. This was driven by an improvement in working capital quarter-over-quarter as well as the benefit of our term loan repricing activity on interest expense. Our cash flow generation from the release of working capital in the first half of the year improved modestly versus 2016 on a like-for-like basis. Cash flow in the quarter was further improved by our implementation of a new factoring program in Europe for our Ag business. As we expected, we saw some increased inventory in the Performance Solutions business tied primarily to safety stock as we continue to execute our facility rationalization plans. We expect working capital to return to a normal full year trends across Q3 and Q4. As we look to the rest of the year, we are providing an update on our key cash flow drivers. We are updating our cash flow interest guidance to approximately $330 million for the year as we capture the benefit of all of the term loan repricing activity. We are narrowing the range of our cash tax guidance by $10 million to a range of $130 million to $150 million for 2017. This update reflects our slightly more optimistic view of earnings for the full year and the impact of some payments related to earnings in prior periods. Finally, our net CapEx guidance remains unchanged from the previous year we provided of approximately $100 million for the year, which is within our long-term target range of 2% to 3% of net -- annual net sales. Q2 includes a seasonality -- Q2 includes seasonally highest working capital point for Platform with net debt at the end of the quarter of just over $5.1 billion. Cash grew to a balance of $427 million at quarter end June 30, 2017. As we expect to continue to grow earnings and for working capital to continue to release over the balance of the year, we expect net debt to decline by more than $200 million. Overall, we remain comfortable with our deleveraging plans for the remainder of this year and the next several years. With that, I'd like to turn the call back to Rakesh for an update on guidance and some concluding remarks. Rakesh?

Thanks, John. Turning to Slide 8, I would like to provide details on our updated guidance. Platform has, as we just said, showed solid performance over the first half of 2017. Global GDP is continuing to perform in line with our expectations, and Europe is showing signs of some additional growth. We are, however, seeing the expected slowdown in the U.S. automotive production, which inevitably impacts our business. On the Ag side, there has not been much movement in commodity prices, and we still expect the overall market to be flat to slightly down for the year. These dynamics have both positive and negative impacts on the outlook for our business. In Ag, Latin America's stability is good for us as this is our biggest market and the biggest driver of results in the second half. The Brazilian real has remained somewhat volatile against the dollar, so that is something we'll be watching closely and reacting to within our business in real time. Coupled with increased demand for Ag specialty portfolio in North America, we believe our Ag business can achieve a low single-digit organic sales growth number for the full year. This is better than our previous guidance on organic sales growth. In Performance Solutions, U.S. auto production softness has so far been offset with strong Mexican production, which has kept our Industrial business growing nicely. We expect this trend to continue throughout the rest of the year, and we expect to start seeing some moderation in Asia growth as well. From an electronics perspective, the comps in the second half become more challenging as we saw a robust recovery at the end of last year. We currently expect full year organic sales growth in Performance Solutions to be in the mid-single digits, which implies a moderation to what…

[Operator Instructions] And our first question comes from the line of Ian Bennett of Bank of America.

How does the CapEx and cash taxes that Platform expects to pay this year compare in the different businesses in Arysta and specialty products?

You want to answer that?

Sure. We have -- we don't provide that level of breakout in terms of cash taxes or CapEx. As you are probably aware, we have a bit more of our CapEx is on the Ag side. We're a little bit more capital -- have a little bit more capital investment than on the MPS side, but we don't expect that to be significantly different than what we've had in the prior year.

So Ian, typically, it's a 60-40 mix. $60 million of the $100 million or so will be in Ag, partly because of the registration work we do and about $40 million would be in our Performance business.

And that would be, perhaps, a similar split in the cash taxes?

Well, we don't break that because a lot of our cash tax planning is really done together, and so we have never really guided to that. We can try and give you some guidance offline, but we don't sort of break that up.

Okay, no worries. And then as a follow up, if Platform were to materially delever and find itself below the 4.5x net debt target, what would be the priorities for the use of cash in that scenario?

Yes. So let me first of all say, we are not cash-starved for organic growth, so we continue to invest appropriate amounts in both the businesses to drive organic growth. And you can see, we're driving both top line and bottom line. Now to the extent that we delever the company and we have opportunities to make acquisitions on the inorganic path. There are opportunities on both sides, there's -- we are in niche businesses. There's a lot of fragmentation across the globe, and I think there are going to be some terrific opportunities for us to continue that path. We're not there today, but the plan would be there when we get there. We will continue that journey.

And our next question comes from Neel Kumar of Morgan Stanley.

I was wondering if you can discuss your expectations for price mix in the second half of the year in Lat America for Ag? And how would you characterize in this industry stocks relative to last year at this time?

Yes. So as -- and I'll let Diego, who's here to give you a little more color. But as you know, we manage our pricing in Latin America very carefully with the movement of the FX rates. And typically, when the Brazilian real gets very strong or gets stronger, our customers expect us to give them some price relief and vice versa. And I think if you look at how we have managed that over the last several years, it really is a zero-sum game. And it's not -- it's going to be no different this year. In addition to pricing from FX adjustments, there's also, obviously, the issue of how we are combating generic pressures, right? So there are 2 issues in Latin America: one is how we manage prices due to movement in FX; and two, is how do we manage pricing as it relates to the competitive pressures. And I think we have done, as I've said, we have done well on the competitive pressure side. We expected -- in fact, it's clearly demonstrating that the brands that we have and the closeness that we have to our customers, distributors and co-ops in Brazil, we are able to charge a premium price and we're doing so. So I don't know, Diego, do you want to add some more color?

You want me to add -- and we're assuming a exchange rate real to U.S. dollar, which is the same as we see currently. This is a modest tailwind compared with the 3.20 to 3.30 that we saw last [indiscernible] . But at the same time, the campaign in LatAm is just starting, so the market has time to adjust. This is why we see -- I mean, we see our pricing power strong, but [indiscernible] this exchange rate tailwind's going to translate immediately into EBIT.

That's helpful. And I was wondering also if you could elaborate on your comments, a decline in overall Performance Solutions EBITDA margins for the quarter. Was that primarily driven by product mix? And do you expect that to continue to have an impact in second half of the year?

Yes. So we had 2 things that drove our margins to be flat. We would have expected margins to be up. And obviously, one was the mix issue where we had greater sales of our assembly product chemistries, which has lower margin. I think the second thing that we got affected somewhat in the quarter was on -- because of raw material price increases that we couldn't correct this quarter, but it's something that Scot who is here will talk about is that in the coming quarters we are going to address and correct that. So it's really -- it's been more of a mix issue clearly that hampered our margin expansion in the business in Q2. Scot?

Sure, Rakesh. And just to follow up on that a little bit, clearly, we see some increased demand in our electronics business. Overall, our core electronics business in the second half, which has higher margins than some of the business that we had in Q2. And as Rakesh said, we are implementing plans to help mitigate some of the raw material price increasing -- price increases that we saw in the quarter. So we do expect better performance in the second half.

And our next question comes from John Tanwanteng of CJS Securities.

Can you just give us an update on the ability to delever through strategic actions? What if anything is in the pipeline or would be considered from an acquisition or divestiture standpoint? Any color on that would be appreciated.

Yes. So I think most of our deleveraging that we are taking -- that's taking place now is through organic growth of increasing EBITDA. We have been talking about increasing our EBITDA in the high single digits every year, and you can do the math. If we increase our EBITDA in the high single digits, which we have been doing. And obviously, our interest expense is going down. We can get to the point we have said we want to get to in a couple of years. Now in terms of accelerating that delevering, if there are opportunities to both buy businesses at the right price, that gives us high EBITDA and reduces the leverage that way. As long as it makes strategic sense, we'll continue to do that. As far as through dispositions, we don't have a lot of noncore businesses in the 2 businesses that we would say could delever dramatically, but we always take a look at that. So I would say that strategically, we look -- we are always considering the overall portfolio of the company. We are always looking at both acquisition and disposition of the company. We feel that even if we are on an organic path, that we are on a good path, given the businesses have good outlook for both businesses that we'll still get to where want to get to in a couple of years. The question is, can we get there sooner? And that will depend on strategic decisions that we make.

Okay, great. Just drilling down the auto market, can you talk about the ability to continue growing there, given the tough comps and decelerating U.S. market? Can global performance or content improvements more than offset those headwinds? What is your exposure to the U.S. on the auto side?

Yes. John, we're still optimistic about our ability to continue to grow in the auto space. We're doing very well in Asia, which was the smallest region for us in our Industrial business. We see the ability to continue to grow in that space for -- in the long term. Clearly, the U.S. has seen a decline in the growth rates that we've experienced over the last 4 or 5 years, so we don't expect that to change materially. But we are making share gains as a result of the combination of the company. So we've been in the mature markets. We feel pretty good about our ability to capture share in the long term. So content growth in emerging markets and share gain in mature markets are all part of our outlook.

And our next question comes from Daniel Jester of Citi.

I just wanted to ask a question about the guidance. So Rakesh, I think in your prepared remarks, you talked about organic growth in both the Performance and the Ag business, so the full year is going to be a little bit more than you had previously expected. And if I remember correctly, on the first quarter, you'd talked about EBITDA headwind from FX about $15 million. Now it seems like it's going to be about $5 million. So I'm wondering if you can help me bridge for the full year only adjusting the guidance by $10 million even though organic growth is going to be higher and the FX headwind is going to be lower.

Yes, thanks. That's a good question. So clearly, I think we have said that we are more optimistic about our top line growth, and so we took the guidance up. I would say we are still a little concerned about the mix and some of the inflationary pressures we have seen recently on the raw material side. So we just want to be cautious about the conversion of the higher growth into higher margins. We want to see what happens over the next couple of months, 2, 3 months, so we will come back to that. The question about FX is, yes, it is -- it was a headwind of $15 million. Now it's going to be a headwind of $5 million. So that's an increase of $10 million. And we've raised the bottom end by $10 million. The question is, does it translate? We're still a little cautious about the volatility in the Brazilian real. And remember that most of our Latin American sales in the Ag business, which is our biggest business in Latin America, occurs in the second half. And to the extent that there's volatility, we have to be cautious. Also on the other hand, most of our Euro sales has already taken place in the first half. So if you look at the Ag sales in Europe, it's a first half phenomenon, so that's behind us. We're going to have some sales in the second half. So the mix really doesn't help us, especially if you think about the volatility in the Brazilian real, and we'll just see. I mean, you guys know how volatile the situation can be in South America and for that reason, we want to be a little cautious.

Okay. That's very helpful color. And then just on Europe Ag, can you talk about how your inventory levels are exiting the season? And should we expect, similar to the release of working capital in the third quarter that you would typically see in the second quarter? Or can you maybe just walk us through how seasonality can affect your working capital there in Europe?

So at the end of the campaign and at the beginning of the next campaign, we usually assess our stocks' levels in the channel, and we are doing this in LatAm and we have done this in Europe. We are ending the campaign in both regions with a healthy level of stock. I would say far below the average of the industry, and that is what gives us confident in -- confidence in the forecast that we have also for the rest of the year. That with respect to stock levels in terms of net working capital. Usually we see the peak of our net working capital in Q1 when we're still selling in Europe, in LatAm, in North America. And after that, we start seeing a decrease quarter-by-quarter until Q4 due to the collection picking up in North America in Q2 and LatAm and Europe in Q3. This year, we're expecting a slight increase in net working capital in Q3 versus Q2. This is because of the delay in the European season that we referred to based on weather. And -- but overall, you will see that we are doing very good progress in working capital management. If you think a net factoring in both at constant and actual exchange rates, we're reducing DSOs and we're also reducing our DIV and increasing our DPOs. So overall, until today, we are exceeding our internal stretch targets with respect to working capital management.

Yes. And obviously, the question behind that is perhaps what's happening to our free cash flow. And it's going to be no different. If you look at the first half of the year, we obviously built working capital. We are selling 2 of the first 6 months with a negative free cash flow approximately $50 million. We fully expect that the second half, we will generate more than $200 million of free cash flow. And as a result, I expect that our free cash flow this year will be somewhere between 50% to 100% higher than 2016. So I think this will be a good year for us from a free cash flow standpoint.

And our next question comes from Chris Parkinson of Crédit Suisse.

You hit on this a little on your prepared remarks, but within Performance Solutions, can you just walk us through the breakdown of organic growth? Just any additional color, memory, PCB, service treatment, et cetera? And just explicitly highlight any material shifts versus your original expectations as of 1Q.

I think coming out, we had a pretty strong Q1 in our core electronics business, which we were not expecting to continue at that rate. So the organic growth in the second quarter was really driven by electronics assembly and our Industrial businesses, which we're expecting to continue although a bit moderated, especially in the Industrial segment for the second half of the year. But things have not fundamentally changed really from when we talked after Q1.

I mean, just to give you a little more color behind what just Scot said. Our Alpha business grew double digits. Our Industrial business grew mid-single digits and our core electronics business also grew in the low to mid-single digits. So we had good growth. The Offshore business was down in Q2, but we expect recovery in the second half. There have been some delays in the program and the orders in Brazil, but we expect the Offshore business to come back in the second half. We expect overall for the year the Offshore business to be somewhat flat, maybe slightly down, not a whole lot down. Although this quarter, it was down quite a bit. And the Graphics business, as I said in my prepared remarks, that was down probably in the high single digits, and that's the one that we are focused on in turning around.

Great. And just turning to Ag, you mentioned some headwinds in EMEA driven by near-term weather issues, the shift in selling strategy in West Africa, et cetera. But in the intermediate to long term, just -- can you give us an update about how you feel about the overall product offering in terms of strength and breadth? And then also if you're seeing any preliminary indicators on credit availabilities improving in Eastern Europe, given the [indiscernible] prospects there? It's interesting to see [indiscernible] Euromarkets. So just kind of putting all that together, just an update on your long-term thoughts.

Good. So we ended actually a solid second quarter and a solid first half in Europe overall. We have sales growth in a market that very likely will show a decline in the first half. We offset the sales decline in Russia and Ukraine due to weather with very solid profitable growth in 3 new subsidiaries that we opened this year and last year in Germany, U.K. and Romania. You'd have to think that Germany and U.K. are 2 of the largest Ag markets in the world, and we are optimistic to expect an important contribution from the teams that we are establishing and the products that we are registering in these markets. We have now a much broader portfolio as the new Arysta coming from the 3 legacies in Europe, and we are rolling out our Pronutiva programs that combine biosolutions with conventional crop protection. You know that Europe is very conscious with respect to reducing residues on fruit and veg, for example, and we're profiting from those trends in Europe as we speak. So we're very confident about our position in Europe and the growth in the future. We have a strong market share in Eastern Europe, in Southern Europe, which are growth regions for Europe overall.

And our next question comes from Robert Koort of Goldman Sachs.

This is Chris Evans on for Bob. I wonder if you could give your expectations and maybe the cadence of your cost reductions and performance for the rest of the year and maybe just going forward beyond that? And then, in prior calls, you talked about some opportunity for a cost program in Ag. I was wondering if you could give an update on that as well.

Okay. Scot, do you want to cover that performance?

Sure. Chris, we're focused right now on our manufacturing operations and facilities around the world. This is a program that we embarked on very heavily towards the end of last year, beginning of this year and we're making great progress. We expect this project to continue well into next year. Facilities are, as you can imagine, are not easy to simply just close, but we've made great progress. We have active programs really in every region of the world, so we will expect to see the benefit of these actions coming in the second half of this year and then well into '18.

Any numbers you could put around that?

I'd rather not. I'd rather not throw specific numbers around ...

Well, I mean as -- so I think Scot's talking about 2 things. One is the synergy that we've already committed to, that number, the $20 million plus that we are going to get in our P&L this year in Scot's business. And I said, we are at about a $50 million run rate. We are committed to getting at least $70 million. So we are going to get the $20 million-plus this year. We're going to get more coming next year from the facility footprint rationalization that we are doing. But in addition to that, there's obviously this continuous cost improvement that Scot's supply chains -- teams are doing, and that's the piece that they're ramping up. And that goes to what we are doing also on the Ag side because we talked about the $100 million program coming from cost reductions in Ag. And I think we are progressing well there, and I'm sure Diego can say a few words on that.

Yes. So we announced $100 million in 5 years. We are very well on track this year compared to that target. We will deliver a savings north of $20 million. This is both in cost of goods sold, project-based savings and SG&A. And these are initiatives like, for example, gaining efficiency on our laps. I mean, we have consolidated 17 laps into 8 laps and that is getting us not only cost improvement, but also efficiency in terms of our time-to-market. And we're working also with suppliers on our key active ingredients with our engineering team to reduce costs at their facilities and with that, getting savings also on the cost of goods. And this is impacting our P&L this year.

And our net question comes from Duffy Fischer, Barclays.

First, 2 questions on Ag. One, just how big is that business in Africa, relative to your Ag business that's been affected by the change in business strategy? And then two, with all the deals going on in Ag, is there a meaningful market share opportunity for you where competitors, maybe, are dropping the ball today where, maybe, a channel supplier doesn't want consolidation in his supply base, so he comes to you guys. Is that something that 2 years from now will turn around, and you guys have taken meaningful market share?

So our Africa business, the size of our Africa business, overall, is north of $200 million on a full year, and so it's a meaningful business for us. I mean, we are #3 in Africa and this is a growth opportunity for us. We were slightly impacted this year by the change of our strategy in West Africa with a impact in Q2 of around $10 million, but we are very confident about the growth and momentum in our private channel. The business is actually doing very well. And with respect to your question on the consolidation, we are profiting out of, I would say, the uncertainty that many distributors are having of not knowing how this market is going to look like in 2, 3 years. And we are obviously very customer-focused, and we are working with them as a Tier 2 player with a high degree of flexibility. Our team is very customer-oriented, so we're taking advantage of that. You know that we are not playing a market share game. I mean, we are focused on niche specialty segments with higher value products. But nevertheless, the fact that we are focused on the customer is helping us this year.

Okay. And then just bigger picture question for Rakesh. How much do you think your multiple is retarded today by the high leverage? So if you get down to your target rate, would you anticipate a higher enterprise value for the company? Or is it just shifting value from the debt guys to the equity guys over time?

Yes. Maybe you have a better answer for me on that. But listen, I think we as stewards of this business, all we can do is drive growth. I think we are -- I'm just very pleased with the way we are headed in these businesses. I don't lose sleep on the leverage issue. I think we are generating good solid cash. We are going to delever this company. I don't think there is cause for anybody to be concerned, and I just hope that it reflects and gets translated by the investment community as they understand our ability to perform and our ability to generate cash that will translate in all the right things. I mean, that's not something that I control.

And our next question comes from John Roberts of UBS.

I think all of the automotive exposure is in the MacDermid unit. And I think that during the 2009 collapse in automotive that MacDermid's overall EBITDA held up quite well. So if auto continues to decline, should we expect EBITDA there to hold up well? Or is there something different this time?

So I think we should probably be a little cautious about the word decline. We're really just seeing a slowing of growth rate in the mature markets. We're still seeing growth clearly in the emerging markets, in the new markets, Asia in particular. And I don't expect our ability to generate and deliver strong EBITDA percentages will change it all, John.

Okay. And then over on the Ag side, I think Chemtura was producing some key ingredients for you. Did that arrangement transfer over to LANXESS unchanged? And is that a long-term contract?

So we have an agreement with Chemtura that will transfer to LANXESS, and we continue to produce our -- a few brands in -- a few plans actually from Chemtura. That agreement is -- can be renewed. It's a long-term agreement.

And our next question comes from Aleksey Yefremov of Nomura.

What do you see in Latin America that makes you more optimistic about the second half? Is it the low level of inventories or good demand from farmers? And also, if you could add any comments on specific crops.

So corn and soy prices rebounded slightly in Q1, right? They came back down in Q2, but they're at the fair level compared to last year. If the exchange rate stays at this level as we see right now and the macro conditions continue to be stable, weather-wise, we're not seeing any dramatic events. It's actually rather positive overall and our farmers are having good margins. So the starting point is good. If you did your homework on the stock channel stock size, which we did, it's a good starting point. And the rest is really our organic growth strategy in LatAm. I mean, we have a tremendous portfolio in LatAm. This is our biggest region. We have a very solid go-to market. So I'm positive that we can repeat what we did also last year in terms of growth in LatAm.

And as a follow-up on the comments you made earlier on the second quarter impact of $10 million from channel adjustment in Africa. Would you -- first of all, is it $10 million of sales or EBITDA? And would you consider that sort of a onetime or a recurring event?

Yes. No, it's a onetime event in sales, not EBITDA so sales. So it's a low margin business, so the impact on EBITDA was small overall.

And our next question comes from Jim Sheehan of SunTrust.

So on your Ag business, can you discuss your -- the situation in Canada? I believe there's a -- there's been drought conditions there in July that's affecting some of the Ag market. Are you seeing any impact of that in your business?

So that's a good question. Yes, we had -- we're seeing some dry conditions in the Northern Plains, including parts of Canada. Where -- obviously, we need to monitor the movement of our product on the ground, but we are also launching a new products, specifically, a new product, a new herbicide in that market that is gaining traction. So we don't see this as a threat for the full year. But in those cases, we're always very close to distributors and farmers to monitor the situation.

Great. And on Performance Solutions, you discussed some raw material headwinds. Can you discuss some of the key raw materials that are rate -- rising in price? And have you seen any changes in those in the third quarter? Are they starting -- are those headwinds starting to ease yet?

I'm sorry, can you repeat the question?

Yes. Just -- what particular raw materials are putting pressures on us?

Sorry. So we've seen some basic commodity raw material price increases. Sodium hydroxide and things of that nature that kind of came fairly quickly, but we're definitely making adjustments and have programs in the future to address that.

And I'm showing no further questions at this time. I would like to turn the conference back over to Rakesh for any closing remarks.

Okay. Thank you, operator. And again, I want to thank everybody for joining us this morning. As I said and as we have discussed on this call, we had a very solid first half of this year. We are looking forward to a solid second half. I think there's a lot to be cautiously optimistic in our businesses. We like where we sit today, and we look forward to updating you when we talk again. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a great day.