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Share Name | Share Symbol | Market | Type |
---|---|---|---|
AptarGroup Inc | NYSE:ATR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
1.00 | 0.69% | 145.38 | 147.21 | 144.38 | 144.38 | 359,575 | 00:55:10 |
AptarGroup, Inc. (NYSE:ATR) today announced record quarterly net income and earnings per share. The Company also announced that it is expanding its Congers, New York facility to include elastomer component capacity for the U.S. injectables market.
Second Quarter 2016 Summary
SECOND QUARTER RESULTS
For the quarter ended June 30, 2016, reported sales increased 4% to $620 million from $594 million a year ago. Excluding the negative impact from changes in currency exchange rates and the positive impact from acquisitions, core sales increased by approximately 3%.
Second Quarter Segment Sales Analysis (Change Over Prior Year) Beauty + Food + Total Home Pharma Beverage AptarGroup Core Sales Growth 4 % 3 % (1 %) 3 % Acquisitions 5 % 1 % -- 3 % Currency Effects (1) (2 %) -- (2 %) (2 %) Total Reported Sales Growth 7 % 4 % (3 %) 4 %(1) - Currency effects are approximated by translating last year's amounts at this year's foreign exchange rates.
Commenting on the quarter, Stephen Hagge, President and CEO, said, “I’m pleased that we achieved record earnings that were substantially driven by strong operating margins across each segment. The recently acquired Mega Airless business also contributed to our reported results. Our consolidated reported pre-tax earnings margin was approximately 14%, and our consolidated EBITDA margin reached approximately 22% in the quarter.”
Hagge continued, “We continue to benefit from our diversified business model that serves eight different markets with a broad portfolio of dispensing and sealing solutions across many different geographies. This diversification consistently supports our overall growth even though we may face softness in one market or region. Our Beauty + Home segment posted core sales growth primarily due to increased demand from the beauty market. Our Pharma segment also grew core sales due to increased demand across each market. Core sales declined in our Food + Beverage segment due in part to decreased custom tooling sales and the negative effects of passing through lower resin costs to our customers. In addition, our Food + Beverage segment was negatively impacted by a decrease in demand from food and beverage customers in Asia.”
AptarGroup reported earnings per share rose 1% to $0.91 compared to $0.90 per share a year ago. Prior year second quarter earnings per share included a positive impact of approximately $0.08 (after-tax) related to a change in accounting for certain inventories from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method. Excluding the effect of the inventory valuation method change, and adjusting to achieve a comparable foreign exchange rate environment, comparable prior year second quarter earnings per share were $0.81. Taking into account these adjustments, current year earnings per share increased 12% over the prior year adjusted earnings per share.
YEAR-TO-DATE RESULTS
For the six months ended June 30, 2016, reported sales increased 2% to $1.20 billion from $1.18 billion a year ago. Excluding the negative impact from changes in currency exchange rates and the positive impact from acquisitions, core sales increased by approximately 2%.
Six Months Year to Date Segment Sales Analysis (Change Over Prior Year) Beauty + Pharma Food + Total Home Beverage AptarGroup Core Sales Growth 1 % 4 % 3 % 2 % Acquisitions 4 % 1 % -- 2 % Currency Effects (1) (4 %) (2 %) (3 %) (2 %) Total Reported Sales Growth 1 % 3 % 0 % 2 %(1) - Currency effects are approximated by translating last year's amounts at this year's foreign exchange rates.
Hagge commented on the year-to-date results, “We continue to focus on our customers’ needs and end consumer behavior in order to offer the best dispensing and sealing solutions worldwide. Our ability to execute on this strategy has delivered core sales growth and strong margins across each of our business segments through the first half of this year. This achievement is despite some lingering softness in certain markets such as the U.S. personal care market, and recently reduced demand from the food and beverage markets in Asia that we saw toward the end of the second quarter.”
For the six months year to date, AptarGroup reported earnings per share decreased approximately 1% to $1.58 compared to $1.59 per share a year ago. Comparable adjusted earnings per share increased 9% to $1.63 compared to $1.50 for 2015. Adjustments to reported results necessary to arrive at comparable adjusted earnings per share are set forth in the accompanying tables.
EXPANDING CONGERS, NEW YORK FACILITY TO INCLUDE ELASTOMER COMPONENT CAPACITY
AptarGroup is investing in elastomer component capacity at its facility in Congers, New York. The investment is expected to total approximately $10 million and will provide an array of processing, finishing and product testing capabilities to better serve customers in the U.S. injectables market. It is expected that the new capacity will be installed by the end of 2016 and will be validated and ready for commercial supply during the first half of 2017.
OUTLOOK
Commenting on AptarGroup’s outlook, Hagge said, “Looking to the third quarter, while we expect continued weakness in the Asian beverage market, we are expecting growth in other markets and our level of project dialog with our customers across each segment remains high. We’re also very excited to be investing in our elastomer capacity for the U.S. market and look forward to that capacity being validated by customers in the first half of 2017.”
AptarGroup expects earnings per share for the third quarter, excluding any potential impacts of the timing of costs incurred and any related insurance reimbursements associated with the Aptar Annecy facility fire, to be in the range of $0.79 to $0.84 compared to $0.83 per share reported in the prior year. Assuming a comparable foreign currency exchange rate environment, comparable earnings per share for the prior year were approximately $0.81.
CASH DIVIDEND
As previously reported, the Board declared on July 13, 2016 a quarterly dividend of $0.30 per share, payable August 17, 2016 to shareholders of record as of July 27, 2016.
OPEN CONFERENCE CALL
There will be a conference call on Friday, July 29, 2016 at 8:00 a.m. Central Time to discuss AptarGroup’s second quarter results for 2016. The call will last approximately one hour. Interested parties are invited to listen to a live webcast by visiting the Investor Relations page at www.aptar.com. Replay of the conference call can also be accessed on the Investor Relations page of the website.
AptarGroup, Inc. is a leading global supplier of a broad range of innovative dispensing and sealing solutions for the beauty, personal care, home care, prescription drug, consumer health care, injectables, food, and beverage markets. AptarGroup is headquartered in Crystal Lake, Illinois, with manufacturing facilities in North America, Europe, Asia and South America. For more information, visit www.aptar.com.
Presentation of Non-GAAP Information
This press release refers to certain non-GAAP financial measures, including adjusted earnings per share, adjusted EBIT and adjusted EBITDA, which exclude the impact of transaction costs and purchase accounting adjustments that affected inventory values related to the recently closed Mega Airless acquisition, certain items included in the provision for income taxes (primarily a significant tax refund) that were recorded in the first quarter of 2016, and income from a change in the method of valuing inventory (from LIFO to FIFO) that was recorded in the second quarter of 2015. Comparable core sales and adjusted earnings per share also exclude the impact of foreign currency translation effects. Non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures provided by other companies. AptarGroup’s management believes it is useful to present these non-GAAP financial measures because they allow for a better period over period comparison of operating results by removing the impact of items that, in management’s view, do not reflect AptarGroup’s core operating performance. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial results, but should be read in conjunction with the unaudited condensed consolidated statements of income and other information presented herein. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in the accompanying tables.
This press release contains forward-looking statements, including certain statements set forth under the “Outlook” section of this press release. Words such as “expects,” “anticipates,” “believes,” “estimates,” “future” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are based on our beliefs as well as assumptions made by and information currently available to us. Accordingly, our actual results may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in our operations and business environment including, but not limited to, the possible impact and consequences of the fire at the Company’s facility in Annecy, France, the ability to integrate the acquired Mega Airless business; economic conditions worldwide including potential deflationary conditions in regions we rely on for growth; political conditions worldwide; significant fluctuations in foreign currency exchange rates; changes in customer and/or consumer spending levels; financial conditions of customers and suppliers; consolidations within our customer or supplier bases; fluctuations in the cost of materials, components and other input costs; the availability of raw materials and components; our ability to successfully implement facility expansions and new facility projects; our ability to increase prices, contain costs and improve productivity; changes in capital availability or cost, including interest rate fluctuations; volatility of global credit markets; cybersecurity threats that could impact our networks and reporting systems; fiscal and monetary policies and other regulations, including changes in tax rates; direct or indirect consequences of acts of war or terrorism; work stoppages due to labor disputes; and competition, including technological advances. For additional information on these and other risks and uncertainties, please see our filings with the Securities and Exchange Commission, including the discussion under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-Ks and Form 10-Qs. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
AptarGroup, Inc. Condensed Consolidated Financial Statements (Unaudited) (In Thousands, Except Per Share Data) Consolidated Statements of Income Three Months Ended Six Months Ended June 30, June 30,2016
2015
2016
2015
Net Sales $ 619,999 $ 594,275 $ 1,202,337 $ 1,184,086 Cost of Sales (exclusive of depreciation and amortization shown below) 389,863 375,278 764,066 761,257 Selling, Research & Development and Administrative 96,131 89,312 199,146 185,499 Depreciation and Amortization 40,390 34,165 76,277 68,225 Operating Income 93,615 95,520 162,848 169,105 Other Income/(Expense): Interest Expense (9,203 ) (9,195 ) (17,794 ) (16,498 ) Interest Income 460 1,105 1,044 2,836 Equity in Results of Affiliates (51 ) (407 ) (172 ) (526 ) Miscellaneous, net (463 ) (1,268 ) (1,723 ) (1,467 ) Income before Income Taxes 84,358 85,755 144,203 153,450 Provision for Income Taxes 25,307 28,214 41,286 50,810 Net Income $ 59,051 $ 57,541 $ 102,917 $ 102,640 Net (Income)/Loss Attributable to Noncontrolling Interests (3 ) (2 ) (6 ) 70 Net Income Attributable to AptarGroup, Inc. $ 59,048 $ 57,539 $ 102,911 $ 102,710 Net Income Attributable to AptarGroup, Inc. per Common Share: Basic $ 0.94 $ 0.92 $ 1.64 $ 1.64 Diluted $ 0.91 $ 0.90 $ 1.58 $ 1.59 Average Numbers of Shares Outstanding: Basic 63,053 62,697 62,888 62,496 Diluted 64,785 64,276 65,063 64,603AptarGroup, Inc. Condensed Consolidated Financial Statements (Unaudited) (continued) (In Thousands) Consolidated Balance Sheets
June 30, 2016
December 31, 2015
ASSETS Cash and Equivalents $ 361,664 $ 489,901 Short-term Investments - 29,816 Total Cash and Equivalents, and Short-term Investments 361,664 519,717 Receivables, net 488,591 391,571 Inventories 325,724 294,912 Other Current Assets 89,264 88,794 Total Current Assets 1,265,243 1,294,994 Net Property, Plant and Equipment 816,438 765,383 Goodwill, net 421,745 310,240 Other Assets 143,496 66,428 Total Assets $ 2,646,922 $ 2,437,045 LIABILITIES AND EQUITY Short-Term Obligations $ 118,952 $ 56,967 Accounts Payable and Accrued Liabilities 381,876 354,928 Total Current Liabilities 500,828 411,895 Long-Term Obligations 771,695 760,848 Deferred Liabilities 115,807 114,596 Total Liabilities 1,388,330 1,287,339 AptarGroup, Inc. Stockholders' Equity 1,258,298 1,149,411 Noncontrolling Interests in Subsidiaries 294 295 Total Equity 1,258,592 1,149,706 Total Liabilities and Equity $ 2,646,922 $ 2,437,045AptarGroup, Inc. Reconciliation of Adjusted EBIT and Adjusted EBITDA to Net Income (Unaudited) (In Thousands) Three Months Ended June 30, 2016 Beauty + Food + Corporate Consolidated Home Pharma Beverage & Other Net Interest Net Sales $ 619,999 340,321 191,034 88,644 - - Reported net income $ 59,051 Reported income taxes 25,307 Reported income before income taxes 84,358 30,547 58,597 13,593 (9,636 ) (8,743 ) Adjustments: None Adjusted earnings before income taxes 84,358 30,547 58,597 13,593 (9,636 ) (8,743 ) Interest expense 9,203 9,203 Interest income (460 ) (460 ) Adjusted earnings before net interest and taxes (Adjusted EBIT) 93,101 30,547 58,597 13,593 (9,636 ) (0 ) Depreciation and amortization 40,390 22,239 10,360 6,072 1,719 - Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 133,491 $ 52,786 $ 68,957 $ 19,665 $ (7,917 ) $ (0 ) Segment income margins 9.0 % 30.7 % 15.3 % Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 21.5 % 15.5 % 36.1 % 22.2 % Three Months Ended June 30, 2015 Beauty + Food +
Corporate
Consolidated Home Pharma Beverage& Other
Net Interest Net Sales $ 594,275 319,124 183,300 91,851 - - Reported net income $ 57,541 Reported income taxes 28,214 Reported income before income taxes 85,755 27,193 55,462 14,991 (3,801 ) (8,090 ) Adjustments: Change in inventory valuation methods (from LIFO to FIFO) (7,427 ) (7,427 ) Adjusted earnings before income taxes 78,328 27,193 55,462 14,991 (11,228 ) (8,090 ) Interest expense 9,195 9,195 Interest income (1,105 ) (1,105 ) Adjusted earnings before net interest and taxes (Adjusted EBIT) 86,418 27,193 55,462 14,991 (11,228 ) - Depreciation and amortization 34,165 18,790 8,856 5,121 1,398 - Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 120,583 $ 45,983 $ 64,318 $ 20,112 $ (9,830 ) $ - Segment income margins 8.5 % 30.3 % 16.3 % Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 20.3 % 14.4 % 35.1 % 21.9 %AptarGroup, Inc. Reconciliation of Adjusted EBIT and Adjusted EBITDA to Net Income (Unaudited) (In Thousands) Six Months Ended June 30, 2016 Beauty + Food + Corporate
Consolidated Home Pharma Beverage & Other
Net Interest
Net Sales $ 1,202,337 654,657 374,169 173,511 - - Reported net income $ 102,917 Reported income taxes 41,286 Reported income before income taxes 144,203 54,075 111,833 22,876 (27,831 ) (16,750 ) Adjustments: Transaction costs related to the Mega Airless acquisition 5,640 5,640 Purchase accounting adjustments related to Mega Airless inventory 2,577 2,151 426 Adjusted earnings before income taxes 152,420 56,226 112,259 22,876 (22,191 ) (16,750 ) Interest expense 17,794 17,794 Interest income (1,044 ) (1,044 ) Adjusted earnings before net interest and taxes (Adjusted EBIT) 169,170 56,226 112,259 22,876 (22,191 ) - Depreciation and amortization 76,277 41,497 19,617 11,896 3,267 - Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 245,447 $ 97,723 $ 131,876 $ 34,772 $ (18,924 ) $ - Segment income margins 8.3 % 29.9 % 13.2 % Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 20.4 % 14.9 % 35.2 % 20.0 % Six Months Ended June 30, 2015 Beauty + Food + Corporate Consolidated Home Pharma Beverage & Other Net Interest Net Sales $ 1,184,086 648,539 361,969 173,578 - - Reported net income $ 102,640 Reported income taxes 50,810 Reported income before income taxes 153,450 50,569 107,463 24,041 (14,961 ) (13,662 ) Adjustments: Change in inventory valuation methods (from LIFO to FIFO) (7,427 ) (7,427 ) Adjusted earnings before income taxes 146,023 50,569 107,463 24,041 (22,388 ) (13,662 ) Interest expense 16,498 16,498 Interest income (2,836 ) (2,836 ) Adjusted earnings before net interest and taxes (Adjusted EBIT) 159,685 50,569 107,463 24,041 (22,388 ) - Depreciation and amortization 68,225 37,818 17,629 10,252 2,526 - Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 227,910 $ 88,387 $ 125,092 $ 34,293 $ (19,862 ) $ - Segment income margins 7.8 % 29.7 % 13.9 % Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 19.2 % 13.6 % 34.6 % 19.8 %AptarGroup, Inc. Reconciliation of Adjusted Earnings Per Diluted Share (Unaudited) ($ in thousands, except per share information) Three Months Ended Six Months Ended June 30, June 30,
2016
2015
2016
2015
Income before Income Taxes $ 84,358 $ 85,755 $ 144,203 $ 153,450Adjustments:
Transaction costs related to the Mega Airless acquisition 5,640 Purchase accounting adjustments related to Mega Airless inventory 2,577 Change in inventory valuation methods (from LIFO to FIFO) (7,427 ) (7,427 ) Foreign currency effects (1) (777 ) (1,548 ) Adjusted Income before Income Taxes $ 84,358 $ 77,551 $ 152,420 $ 144,475 Provision for Income Taxes $ 25,307 $ 28,214 $ 41,286 $ 50,810Adjustments:
Net effect of items included in the Provision for Income Taxes (2) 2,923 Transaction costs related to the Mega Airless acquisition 1,483 Purchase accounting adjustments related to Mega Airless inventory 859 Change in inventory valuation methods (from LIFO to FIFO) (2,599 ) (2,599 ) Foreign currency effects (1) (243 ) (524 ) Adjusted Provision for Income Taxes $ 25,307 $ 25,372 $ 46,551 $ 47,687 Net (Income)/Loss Attributable to Noncontrolling Interests $ (3 ) $ (2 ) $ (6 ) $ 70 Net Income Attributable to AptarGroup, Inc. $ 59,048 $ 57,539 $ 102,911 $ 102,710Adjustments:
Net effect of items included in the Provision for Income Taxes (2) (2,923 ) Transaction costs related to the Mega Airless acquisition 4,157 Purchase accounting adjustments related to Mega Airless inventory 1,718 Change in inventory valuation methods (from LIFO to FIFO) (4,828 ) (4,828 ) Foreign currency effects (1) (534 ) (1,024 ) Adjusted Net Income Attributable to AptarGroup, Inc. $ 59,048 $ 52,177 $ 105,863 $ 96,858 Average Number of Diluted Shares Outstanding 64,785 64,276 65,063 64,603 Net Income Attributable to AptarGroup, Inc. Per Diluted Share $ 0.91 $ 0.90 $ 1.58 $ 1.59Adjustments:
Net effect of items included in the Provision for Income Taxes (2) (0.04 ) Transaction costs related to the Mega Airless acquisition 0.06 Purchase accounting adjustments related to Mega Airless inventory 0.03 Change in inventory valuation methods (from LIFO to FIFO) (0.08 ) (0.07 ) Foreign currency effects (1) (0.01 ) (0.02 ) Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share $ 0.91 $ 0.81 $ 1.63 $ 1.50(1) Foreign currency effects are approximations of the adjustment necessary to state the prior year earnings and earnings per share using current period foreign currency exchange rates.
(2) Items included in the Provision for Income Taxes primarily reflect the effect of a French income tax refund.
AptarGroup, Inc. Reconciliation of Adjusted Earnings Per Diluted Share (Unaudited) ($ in thousands, except per share information) Three Months Ended September 30,Expected 2016
2015
Income before Income Taxes $ 79,377Adjustments:
Foreign currency effects (1) (1,374 ) Adjusted Income before Income Taxes $ 78,003 Provision for Income Taxes $ 26,115Adjustments:
Foreign currency effects (1) (452 ) Adjusted Provision for Income Taxes $ 25,663 Net (Income)/Loss Attributable to Noncontrolling Interests $ (15 ) Net Income Attributable to AptarGroup, Inc. $ 53,247Adjustments:
Foreign currency effects (1) (922 ) Adjusted Net Income Attributable to AptarGroup, Inc. $ 52,325 Average Number of Diluted Shares Outstanding 64,454 Net Income Attributable to AptarGroup, Inc. Per Diluted Share (2) $0.79 - $0.84 $ 0.83Adjustments:
Foreign currency effects (1) (0.02 ) Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share (2) $0.79 - $0.84 $ 0.81(1) Foreign currency effects are approximations of the adjustment necessary to state the prior year earnings per share using foreign currency exchange rates as of June 30, 2016.
(2) AptarGroup’s expected earnings per share range for the third quarter of 2016 excludes any potential effects of the timing of costs incurred and the related insurance reimbursements associated with the Aptar Annecy facility fire.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160728006586/en/
Matthew DellaMariaAptarGroup, Inc.815-477-0424
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