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
- Reported sales increased 6% over the
prior year driven by 3% core growth and a 3% favorable impact from
exchange rates
- Each business segment achieved core
sales growth
- Lower custom tooling sales
negatively impacted the sales growth by 2%
- Reported net income (9% of net
sales) increased to $54 million (+1%)
- EBITDA (19% of net sales) decreased
to $118 million (-4%)
- Profit margins were negatively
impacted by operational challenges at our decorative facility in
Europe, higher professional fees, raw material cost increases and
certain currency transaction losses
- Reported earnings per share were
$0.83 compared to $0.82 in the prior year (+1%)
- Compared to the prior year, earnings
per share for the current period included certain tax benefits
amounting to approximately $0.05 related to foreign tax settlements
and $0.01 related to stock-based compensation
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 + Total
Home
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 $
2,606,785 AptarGroup, Inc.
Reconciliation of EBIT and EBITDA to Net Income (Unaudited)
(In Thousands)
Three Months Ended September 30, 2017
Beauty +
Food + Corporate &
Net
Consolidated
Home
Pharma Beverage Other
Interest
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, 2016
Beauty +
Food + Corporate &
Net
Consolidated
Home
Pharma Beverage Other
Interest
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 Other
Interest
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 Other
Interest
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 $
219,204
Adjustments:
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 $
63,187
Adjustments:
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 $
156,009
Adjustments:
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 $ 2.40
Adjustments:
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 $ 61,293
Adjustments:
Foreign currency effects (1) 4,396 Adjusted Income
before Income Taxes $ 65,689
Provision for
Income Taxes $ 11,706
Adjustments:
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.
$ 49,581
Adjustments:
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
AptarGroup (NYSE:ATR)
Historical Stock Chart
From Mar 2024 to Apr 2024
AptarGroup (NYSE:ATR)
Historical Stock Chart
From Apr 2023 to Apr 2024