AptarGroup, Inc. (NYSE:ATR) today announced first quarter core
sales and earnings per share growth on a comparable basis.
Summary
- Core sales(1), which exclude currency
translation effects and the impact of the recent Mega Airless
acquisition, rose 2% despite a negative impact of 2% from decreased
custom tooling sales and the passing through of lower resin
costs
- Reported sales declined 1% primarily
due to negative currency translation effects of 4%
- Comparable adjusted earnings per
share(1) rose 3% over the prior year and were in-line with previous
guidance
- 2016 comparable adjusted earnings per
share, which excluded the effects of the Mega Airless acquisition
and certain non-recurring tax benefits, were $0.71 compared to
currency-adjusted earnings per share of $0.69 in the prior
year
- Reported earnings per share were $0.67
compared to $0.70 in the prior year
- Strong operating margins across each
business segment drove adjusted EBITDA(1) margin to 19%, an
improvement from 18% in the prior year
- Acquisition of Mega Airless, which
broadens Aptar’s airless portfolio, closed on February 29,
2016
(1) See “Presentation of Non-GAAP Information” and accompanying
tables for further information.
First Quarter Results
For the quarter ended March 31, 2016, reported sales decreased
1% to $582 million from $590 million a year ago. Core sales, which
exclude the negative impact from changes in currency exchange rates
and any contribution from the Mega Airless acquisition, increased
by 2%.
First Quarter Segment Sales Analysis (Change Over Prior
Year) Beauty + Food + Total Home
Pharma Beverage AptarGroup Core Sales Growth
(1 %) 5 % 7 % 2 % Acquisitions 2 % -- -- 1 % Currency Effects (1)
(6 %) (3 %) (3 %) (4 %) Total Reported Sales
Growth (5 %) 2 % 4 % (1 %) (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, “The diversity of our business continues to be a key
strength. Despite some lingering softness in certain markets,
decreased tooling sales, and the passing through of lower resin
costs, we achieved core sales growth excluding currency translation
effects and before including any results of the recently acquired
Mega Airless business. We continued to leverage our robust product
portfolio to help our customers bring new products to market across
each segment. We also performed well operationally with a focus on
efficiencies and cost containment, and grew adjusted earnings per
share and expanded our adjusted EBITDA margin over the prior
year.”
AptarGroup reported earnings per share of $0.67 compared to
$0.70 per share a year ago. First quarter 2016 earnings per share
include the negative impact of costs to complete the Mega Airless
acquisition, which totaled approximately $0.06 per share, and a net
loss from Mega Airless of approximately $0.02 per share that was
due to the negative impact of certain non-recurring purchase
accounting adjustments related to inventory. In addition, first
quarter 2016 earnings were positively affected by unusual tax items
which totaled approximately $0.04 per share. Excluding the
foregoing items, adjusted earnings per share for the first quarter
of 2016 totaled $0.71 per share and this compares to $0.69 per
share in the prior year after neutralizing foreign currency
exchange rate effects.
Outlook
Commenting on AptarGroup’s outlook, Hagge said, “Looking to the
second quarter, our project dialog with customers remains at a good
level and I am optimistic that we will continue to grow our
business. Even though we will be comparing to strong results from
the prior year, we expect continued core sales growth from our
Pharma and Food + Beverage segments. Our Beauty + Home segment,
which has struggled to achieve top line growth the past year, is
also expected to grow core sales over the prior year excluding any
positive impact from the Mega Airless acquisition. Additionally, we
will continue our diligent focus on cost containment as we invest
in growth opportunities.”
AptarGroup expects earnings per share for the second quarter to
be in the range of $0.87-$0.92 including approximately $0.02 per
share of positive contribution from the Mega Airless acquisition.
This range compares to $0.81 per share in the prior year after
excluding approximately $0.08 per share of income recorded in the
second quarter of 2015 related to a change in inventory valuation
methods and after prior year earnings per share have been adjusted
to reflect comparable foreign currency exchange rates. Prior year
second quarter reported earnings per share were $0.90.
Cash Dividend
As previously reported, the Board of Directors declared a
quarterly cash dividend of $0.30 per share. The payment date is May
18, 2016, to stockholders of record as of April 27, 2016.
Open Conference Call
There will be a conference call on Friday, April 29, 2016 at
8:00 a.m. Central Time to discuss AptarGroup’s first 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 for a limited time on the
Investor Relations page of the website.
AptarGroup, Inc. is a leading global supplier of a broad range
of innovative dispensing 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 costs related to the
recently closed Mega Airless acquisition, results of operations of
Mega Airless that include purchase accounting adjustments, and
unusual 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 each non-GAAP
financial measure to the most directly comparable GAAP measure 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 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 March 31,
2016
2015
Net Sales $ 582,338 $ 589,811 Cost of Sales (exclusive of
depreciation and amortization shown below) 374,203 385,979 Selling,
Research & Development and Administrative 103,015 96,187
Depreciation and Amortization
35,887
34,060 Operating Income 69,233 73,585
Other Income/(Expense): Interest Expense (8,591 ) (7,303 ) Interest
Income 584 1,731 Equity in results of affiliates (121 ) (119 )
Miscellaneous, net
(1,260 )
(199 ) Income before Income Taxes 59,845
67,695 Provision for Income Taxes
15,979
22,596 Net Income $ 43,866 $ 45,099
Net (Income)/Loss Attributable to Noncontrolling Interests
(3 ) 72
Net Income Attributable to AptarGroup, Inc.
$
43,863 $ 45,171
Net Income Attributable to AptarGroup, Inc. per Common
Share: Basic
$ 0.70 $
0.73 Diluted
$ 0.67
$ 0.70 Average
Numbers of Shares Outstanding: Basic 62,722 62,292 Diluted 65,063
64,494
AptarGroup, Inc. Condensed
Consolidated Financial Statements (Unaudited) (continued) (In
Thousands)
Consolidated Balance Sheets
March 31,
2016
December 31,
2015
ASSETS Cash and Equivalents $ 385,972 $ 489,901 Short-term
Investments
- 29,816 Total
Cash and Equivalents, and Short-term Investments 385,972 519,717
Receivables, net 483,850 391,571 Inventories 315,199 294,912 Other
Current Assets
86,074
88,794 Total Current Assets 1,271,095 1,294,994 Net
Property, Plant and Equipment 832,556 765,383 Goodwill, net 432,597
310,240 Other Assets
142,785
66,428 Total Assets
$
2,679,033 $ 2,437,045
LIABILITIES AND EQUITY Short-Term Obligations $ 133,998 $
56,967 Accounts Payable and Accrued Liabilities
388,768 354,928 Total Current
Liabilities 522,766 411,895 Long-Term Obligations 773,182 760,848
Deferred Liabilities
115,431
114,596 Total Liabilities 1,411,379 1,287,339
AptarGroup, Inc. Stockholders' Equity 1,267,355 1,149,411
Noncontrolling Interests in Subsidiaries
299
295 Total Equity
1,267,654
1,149,706 Total Liabilities and Equity
$ 2,679,033 $
2,437,045
AptarGroup, Inc. Reconciliation of Adjusted EBIT and
Adjusted EBITDA to Net Income (Unaudited) (In Thousands)
Three Months Ended March 31, 2016 Beauty + Food + Corporate
& Consolidated Home Pharma Beverage
Other Net Interest
Net Sales $ 582,338
314,336 183,135 84,867 - -
Reported net income
$ 43,866 Reported income taxes
15,979
Reported income before income
taxes 59,845 23,528 53,236 9,283
(18,195 ) (8,007 ) Adjustments: Costs
associated with Mega Airless acquisition 5,640 5,640 Non-recurring
purchase accounting adjustments 2,577
2,151 426
Adjusted earnings before income taxes 68,062 25,679
53,662 9,283 (12,555 ) (8,007 ) Interest expense 8,591 8,591
Interest income (584 )
(584 ) Adjusted earnings before
net interest and taxes (Adjusted EBIT) 76,069 25,679 53,662 9,283
(12,555 ) - Depreciation and amortization 35,887
19,258 9,257
5,824 1,548 -
Adjusted earnings before net interest, taxes, depreciation
and amortization (Adjusted EBITDA) $ 111,956 $ 44,937
$ 62,919 $ 15,107 $
(11,007 ) $ - Segment income margins including
non-recurring purchase accounting adjustments 7.5 % 29.1 % 10.9 %
Segment income margins excluding non-recurring purchase accounting
adjustments 8.2 % 29.3 % 10.9 % Adjusted EBITDA margins (Adjusted
EBITDA / Reported Net Sales) 19.2 % 14.3 % 34.4 % 17.8 %
Three Months Ended March 31, 2015 Beauty + Food + Corporate
& Consolidated Home Pharma Beverage
Other Net Interest
Net Sales $ 589,811
329,414 178,669 81,728 - -
Reported net income
$ 45,099 Reported income taxes
22,596
Reported income before income
taxes 67,695 23,375 52,001 9,050
(11,159 ) (5,572 ) Adjustments: None
Adjusted earnings before income taxes 67,695 23,375
52,001 9,050 (11,159 ) (5,572 ) Interest expense 7,303 7,303
Interest income (1,731 )
(1,731 ) Adjusted earnings
before net interest and taxes (Adjusted EBIT) 73,267 23,375 52,001
9,050 (11,159 ) - Depreciation and amortization 34,060
19,028 8,773
5,131 1,128
- Adjusted earnings before net interest, taxes, depreciation
and amortization (Adjusted EBITDA) $ 107,327 $ 42,403
$ 60,774 $ 14,181 $
(10,031 ) $ - Segment income margins 7.1 %
29.1 % 11.1 % Adjusted EBITDA margins (Adjusted EBITDA / Reported
Net Sales) 18.2 % 12.9 % 34.0 % 17.4 %
AptarGroup,
Inc. Reconciliation of Adjusted Earnings Per Diluted Share
(Unaudited) Three Months Ended March 31,
2016
2015
Net Income Attributable to AptarGroup, Inc. Per Diluted
Share $ 0.67 $ 0.70
Adjustments:
Net effect of items included in the Provision for Income Taxes (1)
(0.04 ) Cost related to the Mega Airless acquisition (2) 0.06 Mega
Airless reported loss (including purchase accounting adjustments)
(2) 0.02 Foreign currency effects (2)(3) (0.01
) Adjusted Earnings Per Diluted Share $ 0.71 $ 0.69
(1) Items included in the Provision for Income Taxes
primarily reflect the effect of a French income tax refund.
(2) Tax effects of the after-tax adjustments noted above are as
follows: Three Months Ended March 31,
2016
2015
Cost related to the Mega Airless acquisition $ 0.02 Mega Airless
reported loss (including purchase accounting adjustments) $ 0.01
Foreign currency effects $ - (3) Foreign currency effects
are approximations of the adjustment necessary to state the prior
year earnings per share using current period exchange rates.
Three Months Ended June 30,
Expected
2016
2015
Net Income Attributable to AptarGroup, Inc. Per Diluted
Share $ 0.87 - $ 0.92 $ 0.90
Adjustments:
Change in inventory valuation methods (from LIFO to FIFO) (4) (0.08
) Foreign currency effects (4)(5) (0.01 )
Adjusted Earnings Per Diluted Share $ 0.87 - $ 0.92 $
0.81 (4) Tax effects of the after-tax adjustments
noted above are as follows: Three Months Ended June 30,
2015
Change in inventory valuation methods (from LIFO to FIFO) $ (0.04 )
Foreign currency effects $ - (5) - Foreign currency effects
are approximations of the adjustment necessary to state the prior
year earnings per share using foreign currency exchange rates as of
March 31, 2016.
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AptarGroup, Inc.Matthew DellaMaria815-477-0424
AptarGroup (NYSE:ATR)
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