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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 | |
---|---|---|---|---|---|---|---|---|
0.23 | 0.16% | 146.15 | 147.13 | 144.84 | 147.11 | 120,357 | 18:13:01 |
AptarGroup, Inc. (NYSE: ATR), a global leader in innovative packaging technologies that build brand value, today announced its third quarter results.
Third Quarter 2017 Summary
Third Quarter Results
For the quarter ended September 30, 2017, reported sales increased 6% over the prior year to $624 million. Core sales, which exclude the positive impact from changes in currency exchange rates, increased approximately 3%.
Third Quarter Segment Sales Analysis(Change Over Prior Year)
Beauty +
Food + TotalHome
Pharma Beverage AptarGroup Core Sales Growth 3% 1% 8% 3% Currency Effects (1) 3% 3% 2% 3% Total Reported Sales Growth 6% 4% 10% 6% (1) - Currency effects are approximated by translating last year's amounts at this year's foreign exchange rates.Commenting on the quarter, Stephan Tanda, President and CEO, said, “We are pleased to report sales growth in each of our business segments. Our Pharma segment, the leading provider of drug delivery systems to the pharmaceutical industry, grew sales despite a difficult comparison to the prior year, which included a significant amount of custom tooling sales related to a specific project. Demand for our products was broad-based across each end market, and was especially strong in the consumer health care and injectables markets. In our Beauty + Home segment, sales to the personal care and home care markets improved over the prior year, with new business wins contributing to the growth. We continue to offer the industry’s broadest solutions portfolio and are encouraged by the sales improvements in Beauty + Home as we move forward with our initiatives to return this business to long-term sustainable growth. Our Food + Beverage segment had an excellent quarter as demand for our innovative dispensing closures increased in both the food and beverage markets. Offsetting the positive effects of our segments’ sales growth were several factors that negatively impacted our earnings. We continue to address the operational challenges at our decorative facility in Europe, which had a negative impact on our quarterly results. We also experienced higher professional fees related to specific projects, increased raw material costs and negative currency transaction losses related to our operations in Argentina.”
Aptar’s reported earnings per share increased 1% to $0.83 compared to $0.82 reported a year ago. Current period earnings per share included a positive impact of approximately $0.06 related to certain tax benefits compared to the prior year. Adjusting for changes in currency translation rates, comparable earnings per share for the prior year were approximately $0.85.
Year-to-Date Results
For the nine months ended September 30, 2017, reported sales increased 3% to $1.84 billion from $1.79 billion a year ago. Core sales, which exclude the positive impact from acquisitions, increased approximately 2%. Changes in currency exchange rates did not have a significant impact on the sales growth.
Nine Months Year-to-Date Segment Sales Analysis(Change Over Prior Year)
Beauty + Food + Total Home Pharma Beverage AptarGroup Core Sales Growth 0% 6% 5% 2% Acquisitions 1% 0% 0% 1% Currency Effects (1) 0% 0% (1%) 0% Total Reported Sales Growth 1% 6% 4%3%
(1) - Currency effects are approximated by translating last year's amounts at this year's foreign exchange rates.Tanda commented on the year-to-date results, “We reported top line growth through the first nine months of the year and our Pharma and Food + Beverage segments have performed well, with sales growth in each end market. When we exclude the positive contribution from last year’s acquisition, our Beauty + Home segment achieved sales in line with prior year sales. The diversity of our business continues to be a key strength of Aptar as we serve eight end markets across the globe.”
For the nine months year-to-date, Aptar’s reported earnings per share increased 10% to $2.64 compared to $2.40 reported a year ago. The nine months year-to-date earnings per share included a positive impact of approximately $0.20 related to certain tax benefits compared to the prior year. Prior year adjusted earnings per share, which adjusts for costs related to the Mega Airless acquisition, would have been $2.49.
Outlook
Commenting on Aptar’s outlook, Tanda said, “Looking ahead to the fourth quarter, we expect revenue growth in each segment. We also anticipate certain headwinds will continue, including higher raw material costs and lower results at our decorative facility. We see these as transitory and thus not affecting our long-term view. We remain committed to returning Beauty + Home to profitable growth in the near-term and successfully implementing our new initiatives. Our strong balance sheet allows us to invest in new capabilities and technologies while we remain well-positioned to take advantage of strategic opportunities. We look forward to continuing to leverage our deep understanding of consumer trends and behaviors in order to create value-enhancing solutions for our customers and end consumers around the world.”
Aptar expects earnings per share for the fourth quarter to be in the range of $0.68 to $0.73, excluding any costs related to our current initiatives, compared to $0.77 per share reported in the prior year. Our guidance range is based on an effective tax rate range of 26.5% to 28.5%, which includes an estimate of a potential tax benefit from our adoption of the new accounting standard for share-based compensation. Prior year earnings per share included a positive impact of approximately $0.08 related to certain tax benefits. Adjusting for changes in currency translation rates, comparable earnings per share for the prior year were approximately $0.82.
Cash Dividend
As previously reported, the Board declared on October 19, 2017 a quarterly cash dividend of $0.32 per share, payable November 22, 2017 to stockholders of record as of November 1, 2017.
Open Conference Call
There will be a conference call on Friday, October 27, 2017 at 8:00 a.m. Central Time to discuss Aptar’s third quarter results for 2017. 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 for a limited time on the Investor Relations page of the website.
Aptar 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 prior year adjusted earnings per share and adjusted EBITDA, which exclude the impact of transaction costs and purchase accounting adjustments that affected inventory values related to the Mega Airless acquisition. 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. Aptar’s management believes these non-GAAP financial measures provide useful information to our investors 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 Aptar’s core operating performance. These non-GAAP financial measures also provide investors with certain information used by Aptar’s management when making financial and operational decisions. 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,” “potential” 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 impact and extent of contamination found at the Company’s facility in Brazil; economic conditions worldwide including potential deflationary conditions in regions we rely on for growth; political conditions worldwide; significant fluctuations in foreign currency exchange rates or our effective tax rate; 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 Nine Months Ended September 30, September 30,2017
2016
2017
2016
Net Sales $ 624,326 $ 589,729 $ 1,843,388 $ 1,792,066 Cost of Sales (exclusive of depreciation and amortization shown below) (1) 408,081 381,041 1,192,967 1,145,107 Selling, Research & Development and Administrative (2) 95,748 86,695 292,923 285,841 Depreciation and Amortization 40,087 39,667 114,660 115,944 Operating Income 80,410 82,326 242,838 245,174 Other Income/(Expense): Interest Expense (9,733 ) (8,753 ) (25,707 ) (26,547 ) Interest Income 1,113 715 2,086 1,759 Equity in Results of Affiliates (72 ) (15 ) (142 ) (187 ) Miscellaneous, net (2,200 ) 728 (509 ) (995 ) Income before Income Taxes 69,518 75,001 218,566 219,204 Provision for Income Taxes 15,989 21,901 48,043 63,187 Net Income $ 53,529 $ 53,100 $ 170,523 $ 156,017 Net Income Attributable to Noncontrolling Interests (6 ) (2 ) (6 ) (8 ) Net Income Attributable to AptarGroup, Inc. $ 53,523 $ 53,098 $ 170,517 $ 156,009 Net Income Attributable to AptarGroup, Inc. per Common Share: Basic $ 0.86 $ 0.84 $ 2.73 $ 2.48 Diluted $ 0.83 $ 0.82 $ 2.64 $ 2.40 Average Numbers of Shares Outstanding: Basic 62,592 62,858 62,527 62,878 Diluted 64,821 64,690 64,626 64,989 Notes to the Condensed Consolidated Financial Statements: (1) For the nine months ended September 30, 2016, Cost of Sales included the effect of approximately $2.6 million of purchase accounting adjustments to inventory related to the Mega Airless acquisition. (2) For the nine months ended September 30, 2016, Selling, Research & Development and Administrative included approximately $5.6 million of costs related to the Mega Airless acquisition.AptarGroup, Inc. Condensed Consolidated Financial Statements (Unaudited) (continued) (In Thousands) Consolidated Balance Sheets
September 30, 2017
December 31, 2016
ASSETS Cash and Equivalents $ 1,018,666 $ 466,287 Receivables, net 510,144 433,127 Inventories 323,404 296,914 Other Current Assets 89,181 73,842 Total Current Assets 1,941,395 1,270,170 Net Property, Plant and Equipment 858,439 784,321 Goodwill 439,147 407,522 Other Assets 169,873 144,772 Total Assets $ 3,408,854 $ 2,606,785 LIABILITIES AND EQUITY Short-Term Obligations $ 246,240 $ 173,816 Accounts Payable and Accrued Liabilities 458,797 369,139 Total Current Liabilities 705,037 542,955 Long-Term Obligations 1,271,530 772,737 Deferred Liabilities 110,463 116,851 Total Liabilities 2,087,030 1,432,543 AptarGroup, Inc. Stockholders' Equity 1,321,514 1,173,950 Noncontrolling Interests in Subsidiaries 310 292 Total Equity 1,321,824 1,174,242 Total Liabilities and Equity $ 3,408,854 $ 2,606,785AptarGroup, Inc. Reconciliation of EBIT and EBITDA to Net Income (Unaudited) (In Thousands) Three Months Ended September 30, 2017
Beauty +
Food + Corporate &Net
ConsolidatedHome
Pharma Beverage OtherInterest
Net Sales $ 624,326 333,748 199,547 91,031 - - Reported net income $ 53,529 Reported income taxes 15,989 Reported income before income taxes 69,518 21,837 55,426 11,668 (10,793 ) (8,620 ) Adjustments: None Earnings before income taxes 69,518 21,837 55,426 11,668 (10,793 ) (8,620 ) Interest expense 9,733 9,733 Interest income (1,113 ) (1,113 ) Earnings before net interest and taxes (EBIT) 78,138 21,837 55,426 11,668 (10,793 ) - Depreciation and amortization 40,087 20,790 10,834 6,448 2,015 - Earnings before net interest, taxes, depreciation and amortization (EBITDA) $ 118,225 $ 42,627 $ 66,260 $ 18,116 $ (8,778 ) $ - Segment income margins (Income before income taxes / Reported Net Sales) 6.5 % 27.8 % 12.8 % EBITDA margins (EBITDA / Reported Net Sales) 18.9 % 12.8 % 33.2 % 19.9 % Three Months Ended September 30, 2016Beauty +
Food + Corporate &Net
ConsolidatedHome
Pharma Beverage OtherInterest
Net Sales $ 589,729 316,030 191,194 82,505 - - Reported net income $ 53,100 Reported income taxes 21,901 Reported income before income taxes 75,001 25,380 55,037 10,101 (7,479 ) (8,038 ) Adjustments: None Earnings before income taxes 75,001 25,380 55,037 10,101 (7,479 ) (8,038 ) Interest expense 8,753 8,753 Interest income (715 ) (715 ) Earnings before net interest and taxes (EBIT) 83,039 25,380 55,037 10,101 (7,479 ) - Depreciation and amortization 39,667 21,653 10,185 6,064 1,765 - Earnings before net interest, taxes, depreciation and amortization (EBITDA) $ 122,706 $ 47,033 $ 65,222 $ 16,165 $ (5,714 ) $ - Segment income margins (Income before income taxes / Reported Net Sales) 8.0 % 28.8 % 12.2 % EBITDA margins (EBITDA / Reported Net Sales) 20.8 % 14.9 % 34.1 % 19.6 %AptarGroup, Inc. Reconciliation of EBIT, Adjusted EBIT, EBITDA and Adjusted EBITDA to Net Income (Unaudited) (In Thousands) Nine Months Ended September 30, 2017 Beauty + Food + Corporate &
Net
Consolidated Home Pharma Beverage OtherInterest
Net Sales $ 1,843,388 978,313 598,161 266,914 - - Reported net income $ 170,523 Reported income taxes 48,043 Reported income before income taxes 218,566 69,248 174,288 31,385 (32,734 ) (23,621 ) Adjustments: None Earnings before income taxes 218,566 69,248 174,288 31,385 (32,734 ) (23,621 ) Interest expense 25,707 25,707 Interest income (2,086 ) (2,086 ) Earnings before net interest and taxes (EBIT) 242,187 69,248 174,288 31,385 (32,734 ) - Depreciation and amortization 114,660 60,017 30,462 18,371 5,810 - Earnings before net interest, taxes, depreciation and amortization (EBITDA) $ 356,847 $ 129,265 $ 204,750 $ 49,756 $ (26,924 ) $ - Segment income margins (Income before income taxes / Reported Net Sales) 7.1 % 29.1 % 11.8 % EBITDA margins (EBITDA / Reported Net Sales) 19.4 % 13.2 % 34.2 % 18.6 % Nine Months Ended September 30, 2016 Beauty + Food + Corporate &Net
Consolidated Home Pharma Beverage OtherInterest
Net Sales $ 1,792,066 970,687 565,363 256,016 - - Reported net income $ 156,017 Reported income taxes 63,187 Reported income before income taxes 219,204 79,455 166,870 32,977 (35,310 ) (24,788 ) 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 227,421 81,606 167,296 32,977 (29,670 ) (24,788 ) Interest expense 26,547 26,547 Interest income (1,759 ) (1,759 ) Adjusted earnings before net interest and taxes (Adjusted EBIT) 252,209 81,606 167,296 32,977 (29,670 ) - Depreciation and amortization 115,944 63,150 29,802 17,960 5,032 - Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) $ 368,153 $ 144,756 $ 197,098 $ 50,937 $ (24,638 ) $ - Segment income margins (Income before income taxes / Reported Net Sales) 8.2 % 29.5 % 12.9 % Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) 20.5 % 14.9 % 34.9 % 19.9 %AptarGroup, Inc. Reconciliation of Adjusted Earnings Per Diluted Share (Unaudited) ($ in thousands, except per share information) Three Months Ended Nine Months Ended September 30, September 30,
2017
2016
2017
2016
Income before Income Taxes $ 69,518 $ 75,001 $ 218,566 $ 219,204Adjustments:
Transaction costs related to the Mega Airless acquisition 5,640 Purchase accounting adjustments related to Mega Airless inventory 2,577 Foreign currency effects (1) 3,008 279 Adjusted Income before Income Taxes $ 69,518 $ 78,009 $ 218,566 $ 227,700 Provision for Income Taxes $ 15,989 $ 21,901 $ 48,043 $ 63,187Adjustments:
Transaction costs related to the Mega Airless acquisition 1,483 Purchase accounting adjustments related to Mega Airless inventory 859 Foreign currency effects (1) 798 123 Adjusted Provision for Income Taxes $ 15,989 $ 22,699 $ 48,043 $ 65,652 Net Income Attributable to Noncontrolling Interests $ (6 ) $ (2 ) $ (6 ) $ (8 ) Net Income Attributable to AptarGroup, Inc. $ 53,523 $ 53,098 $ 170,517 $ 156,009Adjustments:
Transaction costs related to the Mega Airless acquisition 4,157 Purchase accounting adjustments related to Mega Airless inventory 1,718 Foreign currency effects (1) 2,210 156 Adjusted Net Income Attributable to AptarGroup, Inc. $ 53,523 $ 55,308 $ 170,517 $ 162,040 Average Number of Diluted Shares Outstanding 64,821 64,690 64,626 64,989 Net Income Attributable to AptarGroup, Inc. Per Diluted Share $ 0.83 $ 0.82 $ 2.64 $ 2.40Adjustments:
Transaction costs related to the Mega Airless acquisition 0.06 Purchase accounting adjustments related to Mega Airless inventory 0.03 Foreign currency effects (1) 0.03 - Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share $ 0.83 $ 0.85 $ 2.64 $ 2.49 (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.AptarGroup, Inc. Reconciliation of Adjusted Earnings Per Diluted Share (Unaudited) ($ in thousands, except per share information) Three Months Ended December 31,
Expected 2017
2016
Income before Income Taxes $ 61,293Adjustments:
Foreign currency effects (1) 4,396 Adjusted Income before Income Taxes $ 65,689 Provision for Income Taxes $ 11,706Adjustments:
Foreign currency effects (1) 936 Adjusted Provision for Income Taxes $ 12,642 Net Income Attributable to Noncontrolling Interests $ (6 ) Net Income Attributable to AptarGroup, Inc. $ 49,581Adjustments:
Foreign currency effects (1) 3,460 Adjusted Net Income Attributable to AptarGroup, Inc. $ 53,041 Average Number of Diluted Shares Outstanding 64,220 Net Income Attributable to AptarGroup, Inc. Per Diluted Share (2) $0.68 - $0.73 $0.77
Adjustments:
Foreign currency effects (1)0.05
Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share (2) $0.68 - $0.73 $
0.82
(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 September 30, 2017. (2) AptarGroup’s expected earnings per share range for the fourth quarter of 2017 is based on an effective tax rate range of 26.5% to 28.5%, which includes an estimate of a potential tax benefit from our adoption of the new accounting standard for share-based compensation.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171026006640/en/
AptarGroup, Inc.Investor Relations Contact:Matthew DellaMariamatt.dellamaria@aptar.com815-477-0424orMedia Contact:Katie Reardonkatie.reardon@aptar.com815-477-0424
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