Highlights
- Record net income of $2.42 per diluted
share
- Record adjusted net income of $1.65 per
diluted share
- Cash from operations of $389.7 million,
or $3.50 per diluted share
- Free cash flow of $224.1 million, or
$2.01 per diluted share
- Enhanced the scope and growth
opportunities of the Company with the Dispensing Systems
acquisition
- Delivered significant improvement in
the plastic container business
- Initiated construction on two new
manufacturing facilities to support growth in the pet food
market
- Recognized $110.9 million net reduction
in future cash tax obligations primarily due to the recently
enacted U.S. Tax Cuts and Jobs Act
- Refinanced debt portfolio to extend
maturities, increase flexibility and increase long-term fixed rate
debt at attractive interest rates
- Completed third 2-for-1 stock
split
- Increased cash dividend per share by
approximately 6 percent
Silgan Holdings Inc. (Nasdaq:SLGN), a leading supplier of rigid
packaging for consumer goods products, today reported full year
2017 record net income of $269.7 million, or $2.42 per diluted
share, as compared to full year 2016 net income of $153.4 million,
or $1.27 per diluted share.
“In 2017, we posted record adjusted net income per diluted share
of $1.65, an increase of approximately 20 percent over the prior
year, and an increase of approximately 25 percent in free cash flow
to $224.1 million,” said Tony Allott, President and CEO. “We
successfully integrated the Dispensing Systems operations, which we
acquired in April 2017, and are very pleased with its performance
and opportunities to further grow our closures portfolio. As
expected, our metal and plastic container businesses benefitted
from lower manufacturing costs and improved efficiencies throughout
the year as a result of our footprint optimization programs
completed in 2016,” continued Mr. Allott. “Lastly, at the end of
2017, the U.S. passed tax reform that will significantly benefit
Silgan, which had been operating with comparative tax rate
disadvantages to many of its competitors. This new tax reform will
reduce our future cash obligations for existing net deferred tax
liabilities, reduce our tax rates on future U.S. earnings and allow
us greater flexibility to utilize global cash to invest in the most
optimal locations. We believe Silgan is well positioned for another
year of double digit earnings growth, with adjusted net income per
diluted share for 2018 estimated to be in a range of $2.03 to
$2.13, and for further growth investment in the coming years. As a
result, we expect to continue to improve free cash flow, which we
estimate to be approximately $300 million in 2018,” concluded Mr.
Allott.
Adjusted net income per diluted share was $1.65 for the full
year 2017, after adjustments decreasing net income per diluted
share by $0.77, including $1.00 in net tax adjustments reflecting
reduced future cash tax obligations. Adjusted net income per
diluted share was $1.38 for the full year 2016, after adjustments
increasing net income per diluted share by $0.11. A reconciliation
of net income per diluted share to “adjusted net income per diluted
share,” a Non-GAAP financial measure used by the Company which
adjusts net income per diluted share for certain items, can be
found in Tables A and B at the back of this press release.
All per share amounts for prior periods have been adjusted for
the two-for-one stock split that occurred on May 26, 2017.
The Company reported net cash provided by operating activities
of $389.7 million in 2017 as compared to $394.6 million in 2016.
Free cash flow improved $44.2 million to $224.1 million in 2017 as
compared to $179.9 million in 2016 primarily as a result of lower
capital expenditures and improved operating performance, partially
offset by costs attributable to announced acquisitions. The Company
is providing a reconciliation in Table C of this press release of
net cash provided by operating activities to “free cash flow,” a
Non-GAAP financial measure which adjusts net cash provided by
operating activities for capital expenditures and changes in
outstanding checks.
Net sales for the full year of 2017 were $4.09 billion, an
increase of $477.0 million, or 13.2 percent, as compared to 2016.
This increase was the result of the acquisition of the Dispensing
Systems operations in April 2017 and higher net sales across all
businesses.
Income from operations for 2017 was $357.0 million, an increase
of $57.3 million, or 19.1 percent, as compared to $299.7 million
for 2016, and operating margin increased to 8.7 percent from 8.3
percent over the same periods. The increase in income from
operations was the result of higher income from operations in the
closures business due to the acquisition of Dispensing Systems and
higher income from operations in the metal and plastic container
businesses. Rationalization charges were $5.8 million and $19.1
million in 2017 and 2016, respectively. Costs attributed to
announced acquisitions were $24.7 million and $1.4 million in 2017
and 2016, respectively.
Interest and other debt expense before loss on early
extinguishment of debt for 2017 was $110.2 million, an increase of
$42.4 million as compared to 2016 due primarily to higher average
outstanding borrowings principally as a result of additional
borrowings for the acquisition of Dispensing Systems in April 2017
and higher weighted average interest rates, including the impact
from increasing long-term fixed rate debt through the issuance in
February 2017 of the 4 3/4% senior notes due 2025 and the 3 1/4%
senior notes due 2025. Loss on early extinguishment of debt of $7.1
million in 2017 was a result of the prepayment of outstanding U.S.
term loans and Euro term loans under the previous senior secured
credit facility in conjunction with the issuance of the new senior
notes and the partial redemption in April 2017 of the 5% senior
notes due 2020.
The effective tax rate for 2017 was a negative 12.5 percent as
compared to a provision of 33.9 percent for 2016. The effective tax
rate for 2017 was favorably impacted by the benefit from effective
tax rate adjustments totaling $110.9 million, or $1.00 per diluted
share, primarily related to the revaluation of net deferred tax
liabilities to reflect lower future cash tax obligations as a
result of the reduction in U.S. corporate income tax rates under
the recently enacted U.S. Tax Cuts and Jobs Act of 2017. The tax
rate calculated under the recently enacted U.S. Tax Cuts and Jobs
Act reflects the Company’s best provisional estimate of the new
legislation’s impact. As new information becomes available,
including the issuance of interpretations by regulatory bodies, the
Company may update this estimate. The tax rate in 2017, exclusive
of these effective tax rate adjustments, would have been a
provision of 33.8 percent.
Metal Containers
Net sales of the metal container business were $2.28 billion in
2017, an increase of $6.2 million, or 0.3 percent, as compared to
2016. This increase was primarily a result of the pass through of
higher raw material costs and the impact of favorable foreign
currency translation, partially offset by lower unit volumes of
approximately two percent principally attributable to lower soup
volumes and a less favorable fruit and tomato pack on the west
coast of the United States.
Income from operations of the metal container business in 2017
was $230.2 million, an increase of $15.5 million as compared to
$214.7 million in 2016, and operating margin increased to 10.1
percent in 2017 from 9.5 percent in the prior year. The increase in
income from operations was primarily attributable to lower
manufacturing costs, lower rationalization charges and the
favorable impact from an increase in inventories in the current
year as compared to a decrease in inventories in the prior year,
partially offset by the impact of lower unit volumes, the
unfavorable impact from the contractual pass through to customers
of indexed deflation, an increase in depreciation expense, the
unfavorable impact of a charge related to the resolution of a past
non-commercial legal dispute and foreign currency transaction
losses in the current year period as compared to foreign currency
transaction gains in the prior year period. Rationalization charges
were $3.3 million and $12.1 million in 2017 and 2016,
respectively.
Closures
Net sales of the closures business were $1.25 billion in 2017,
an increase of $449.6 million, or 56.4 percent, as compared to
$797.1 million in 2016. This increase was primarily the result of
the inclusion of the Dispensing Systems operations, the pass
through of higher raw material costs and the impact of favorable
foreign currency translation, partially offset by lower unit
volumes of approximately three percent in the legacy closures
operations as compared to record volumes in the prior year period
principally as a result of a decline in single-serve beverages due
to cooler weather conditions in major markets served.
Income from operations of the closures business for 2017
increased $42.2 million to $142.0 million as compared to $99.8
million in 2016, while operating margin decreased to 11.4 percent
from 12.5 percent over the same periods. The increase in income
from operations was primarily due to the inclusion of Dispensing
Systems and lower manufacturing costs, partially offset by the
impact from a decrease in unit volumes in the legacy closures
operations. Operating margin was unfavorably impacted primarily due
to the write-up of inventory of Dispensing Systems for purchase
accounting.
Plastic Containers
Net sales of the plastic container business were $565.1 million
in 2017, an increase of $21.2 million, or 3.9 percent, as compared
to $543.9 million in 2016. This increase was principally due to the
pass through of higher raw material costs, higher volumes of
approximately two percent and the impact of favorable foreign
currency translation, partially offset by a less favorable mix of
products sold.
Income from operations of the plastic container business in 2017
was $27.8 million, an increase of $22.6 million as compared to $5.2
million in 2016, and operating margin increased to 4.9 percent from
1.0 percent over the same periods. The increase in income from
operations was primarily attributable to lower manufacturing costs,
higher volumes and lower rationalization charges, partially offset
by higher depreciation expense and the unfavorable impact from the
lagged pass through of increases in resin costs. Rationalization
charges were $1.5 million and $6.4 million in 2017 and 2016,
respectively.
Fourth Quarter
The Company reported record net income for the fourth quarter of
2017 of $146.1 million, or $1.31 per diluted share, as compared to
net income for the fourth quarter of 2016 of $23.7 million, or
$0.20 per diluted share. Adjusted net income per diluted share for
the fourth quarter of 2017 was a record $0.32, after adjustments
decreasing net income per diluted share by $0.99, including $1.00
in net tax adjustments reflecting reduced future cash tax
obligations. Adjusted net income per diluted share for the fourth
quarter of 2016 was $0.24, after adjustments increasing net income
per diluted share by $0.04.
Net sales for the fourth quarter of 2017 increased $189.8
million, or 23.6 percent, to $995.7 million as compared to $805.9
million for the fourth quarter of 2016. This increase was primarily
due to the inclusion of the Dispensing Systems operations, the pass
through of higher raw material costs, the impact of favorable
foreign currency translation and an increase in volumes of
approximately four percent in the plastic container business,
partially offset by a decrease in unit volumes in the legacy
closures operations and metal container business of approximately
four percent and one percent, respectively.
Income from operations for the fourth quarter of 2017 was $86.4
million, an increase of $34.2 million as compared to $52.2 million
for the fourth quarter of 2016, and operating margin increased to
8.7 percent from 6.5 percent over the same periods. The increase in
income from operations was primarily due to the inclusion of the
Dispensing Systems operations, manufacturing efficiencies and lower
costs in each of the businesses, the favorable impact in the metal
container business of an increase in inventories in the fourth
quarter of 2017 as compared to a decrease in inventories in the
prior year period, lower rationalization charges and higher volumes
in the plastic container business. These increases were partially
offset by lower unit volumes in the legacy closures operations and
metal container business and the unfavorable impact from the
contractual pass through to customers of indexed deflation in the
metal container business. Rationalization charges were $1.3 million
and $5.1 million in the fourth quarters of 2017 and 2016,
respectively. Costs attributed to announced acquisitions were $0.9
million and $1.4 million in the fourth quarters of 2017 and 2016,
respectively.
Interest and other debt expense for the fourth quarter of 2017
was $30.0 million, an increase of $12.9 million as compared to the
fourth quarter of 2016. This increase was primarily due to higher
average outstanding borrowings principally as a result of
additional borrowings for the acquisition of Dispensing Systems and
higher weighted average interest rates, including the impact from
increasing long-term fixed rate debt through the issuance in
February 2017 of the 4 3/4% senior notes due 2025 and the 3 1/4%
senior notes due 2025 and rising interest rates.
The effective tax rate for the fourth quarter of 2017 was a
negative 159.2 percent as compared to a provision of 32.4 percent
for the fourth quarter of 2016. The effective tax rate for the
fourth quarter of 2017 was favorably impacted by the benefit from
effective tax rate adjustments totaling $110.9 million, or $1.00
per diluted share, primarily related to the revaluation of net
deferred tax liabilities to reflect lower future cash tax
obligations as a result of the reduction in U.S. corporate income
tax rates under the recently enacted U.S. Tax Cuts and Jobs Act of
2017. The tax rate in the fourth quarter of 2017, exclusive of
these effective tax rate adjustments, would have been a provision
of 37.6 percent primarily due to the negative impact of the
settlement of certain tax disputes, partially offset by higher
income in more favorable tax jurisdictions.
New Manufacturing Facilities
The Company has initiated construction of a metal container
manufacturing facility in Allentown, Pennsylvania to serve a major
pet food customer. In addition, the Company has initiated
construction of a thermoformed plastic container manufacturing
facility in Fort Smith, Arkansas in support of continued
growth.
Outlook for 2018
The Company currently estimates that its adjusted net income per
diluted share for the full year 2018 will be in the range of $2.03
to $2.13, as compared to adjusted net income per diluted share for
the full year of 2017 of $1.65. Adjusted net income per diluted
share excludes rationalization charges, loss on early
extinguishment of debt, costs attributed to announced acquisitions
and the net impact of certain effective tax rate adjustments in the
fourth quarter of 2017.
Net sales in the metal container business are expected to
increase in 2018 as compared to 2017 primarily due to the pass
through of higher raw material and other manufacturing costs and
the impact from anticipated favorable foreign currency rates. Unit
volumes in the metal container business are expected to be flat as
an anticipated normal fruit and vegetable pack on the west coast of
the U.S. and continued growth in pet food are offset by potential
declines in certain other can markets. Income from operations in
the metal container business is expected to benefit from continued
manufacturing efficiencies and the lagged contractual pass through
to customers of indexed inflation. However, much of this
improvement is expected to be offset by the impact from unfavorable
overhead absorption from a significant planned reduction in
inventories in the U.S. as the Company generates additional cash
and realizes supply chain benefits arising from its footprint
optimization program. Net sales in the closures business are
expected to increase in 2018 as compared to 2017 primarily as a
result of the benefit of a full year of Dispensing Systems, the
pass through of higher raw material and other manufacturing costs,
the impact from anticipated favorable foreign currency rates and
improved unit volumes. Income from operations in the closures
business is expected to increase in 2018 primarily as a result of
the benefit of a full year of Dispensing Systems, including
expected synergies and the absence of the prior year unfavorable
impact from the inventory write-up for purchase accounting,
continued manufacturing efficiencies and higher unit volumes. Net
sales in the plastic container business are expected to increase in
2018 as compared to the prior year as a result of volume growth and
the pass through of higher raw material costs. Income from
operations in the plastic container business is expected to benefit
from continued manufacturing efficiencies and volume growth,
partially offset by costs associated with the start-up of the new
plant in Fort Smith, Arkansas.
The Company expects interest expense to increase in 2018 due to
higher average outstanding borrowings as a result of additional
borrowings for the acquisition of Dispensing Systems in April 2017
and higher weighted average interest rates due primarily to market
rate increases on variable rate debt.
The Company expects its effective tax rate for 2018 to be
approximately 24 percent, as compared to the effective tax rate for
2017 of 33.8 percent excluding certain effective tax rate
adjustments. The effective tax rate for 2018 reflects the current
estimate of the impact from the recently enacted U.S. Tax Cuts and
Jobs Act of 2017.
The Company currently estimates that free cash flow in 2018 will
increase approximately 34 percent to approximately $300 million as
compared to $224.1 million in 2017. The expected increase in free
cash flow is primarily the result of operating income improvement
in each of the businesses, including the impact from a full year of
Dispensing Systems, improvements in working capital principally as
a result of a significant planned reduction in inventories in the
metal container business and the benefit of a lower effective tax
rate, partially offset by an increase in interest payments and
capital expenditures.
For the first quarter of 2018, the Company is providing an
estimate of adjusted net income per diluted share in the range of
$0.32 to $0.36, as compared to $0.31 in the first quarter of 2017.
The increase over the prior year is due primarily to the inclusion
of the Dispensing Systems operations in the first quarter of 2018
and the benefit of a lower effective tax rate, partially offset by
higher interest expense, the unfavorable impact of a significantly
lower seasonal inventory build than in the prior year period in the
metal container business and the unfavorable impact from the lagged
pass through of increases in resin costs. Adjusted net income per
diluted share excludes rationalization charges, loss on early
extinguishment of debt and costs attributed to announced
acquisitions.
Conference Call
Silgan Holdings Inc. will hold a conference call to discuss the
Company’s results for the fourth quarter and full year 2017 at
11:00 a.m. eastern time on January 31, 2018. The toll free number
for those in the U.S. and Canada is 800-239-9838 and the number for
international callers is 323-794-2551. For those unable to listen
to the live call, a taped rebroadcast will be available through
February 14, 2018. To access the rebroadcast, U.S. and Canadian
callers should dial 888-203-1112 and international callers should
dial 719-457-0820. The pass code is 8955953.
Silgan is a leading supplier of rigid packaging for consumer
goods products with annual net sales of approximately $4.1 billion
in 2017. Silgan operates 100 manufacturing facilities in North and
South America, Europe and Asia. The Company is a leading supplier
of metal containers in North America and Europe for food and
general line products. The Company is also a leading worldwide
supplier of metal and plastic closures and dispensing systems for
food, beverage, health care, garden, home and beauty products. In
addition, the Company is a leading supplier of plastic containers
for shelf-stable food and personal care products in North
America.
Statements included in this press release which are not
historical facts are forward looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and the Securities Exchange Act of 1934, as
amended. Such forward looking statements are made based upon
management’s expectations and beliefs concerning future events
impacting the Company and therefore involve a number of
uncertainties and risks, including, but not limited to, those
described in the Company’s Annual Report on Form 10-K for 2016 and
other filings with the Securities and Exchange Commission.
Therefore, the actual results of operations or financial condition
of the Company could differ materially from those expressed or
implied in such forward looking statements.
SILGAN HOLDINGS INC. CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
For the quarter and year ended December
31,
(Dollars in millions, except per share
amounts)
Fourth
Quarter
Year
Ended
2017
2016
2017
2016
Net sales $ 995.7 $ 805.9 $ 4,089.9 $ 3,612.9 Cost of
goods sold
836.9
695.9 3,428.8
3,079.4 Gross profit 158.8 110.0 661.1 533.5
Selling, general and administrative expenses 71.1 52.7 298.3
214.7 Rationalization charges
1.3
5.1 5.8
19.1 Income from operations 86.4 52.2 357.0
299.7
Interest and other debt expense before
loss on early extinguishment of debt
30.0 17.1 110.2 67.8
Loss on early extinguishment of debt
- -
7.1
-
Interest and other debt expense
30.0
17.1 117.3
67.8 Income before income taxes 56.4 35.1 239.7
231.9 (Benefit) provision for income taxes
(89.7 ) 11.4
(30.0 ) 78.5
Net income
$ 146.1 $
23.7 $ 269.7
$ 153.4 Earnings per share: (1)
Basic net income per share $ 1.32 $ 0.20 $ 2.44 $ 1.28 Diluted net
income per share $ 1.31 $ 0.20 $ 2.42 $ 1.27 Cash dividends
per share (1) $ 0.09 $ 0.09 $ 0.36 $ 0.34 Weighted average
shares (000’s): (1) Basic 110,429 116,155 110,353 119,732 Diluted
111,480 116,993 111,363 120,498
(1)
Per share and share amounts have been adjusted for the
two-for-one stock split that occurred on May 26, 2017.
SILGAN HOLDINGS INC.
CONSOLIDATED SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
For the quarter and year ended December
31,
(Dollars in millions)
Fourth
Quarter
Year
Ended
2017
2016
2017
2016
Net sales: Metal containers $ 509.7 $ 491.5 $ 2,278.1 $ 2,271.9
Closures 342.6 182.5 1,246.7 797.1 Plastic containers
143.4 131.9
565.1 543.9
Consolidated
$ 995.7
$ 805.9 $
4,089.9 $ 3,612.9
Income from operations: Metal containers (a) $ 44.7 $
33.2 $ 230.2 $ 214.7 Closures (b) 39.1 21.6 142.0 99.8 Plastic
containers (c) 7.8 3.4 27.8 5.2 Corporate (d)
(5.2 )
(6.0 )
(43.0 ) (20.0
) Consolidated
$ 86.4
$ 52.2 $
357.0 $ 299.7
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31,
(Dollars in millions)
2017
2016
Assets: Cash and cash equivalents $ 53.5 $ 24.7 Trade accounts
receivable, net 454.6 288.2 Inventories 721.3 603.0 Other current
assets 62.5 46.3 Property, plant and equipment, net 1,489.9 1,157.0
Other assets, net
1,863.6
1,030.2 Total assets
$
4,645.4 $ 3,149.4
Liabilities and stockholders’ equity: Current liabilities,
excluding debt $ 849.4 $ 644.7 Current and long-term debt 2,547.3
1,561.6 Other liabilities 482.6 473.7 Stockholders’ equity
766.1 469.4 Total liabilities and
stockholders’ equity
$ 4,645.4
$ 3,149.4 (a) Includes
rationalization charges of $3.7 million for the fourth quarter of
2016 and $3.3 million and $12.1 million for the years ended
December 31, 2017 and 2016, respectively. (b) Includes
rationalization charges of $0.5 million and $0.1 million for the
fourth quarters of 2017 and 2016, respectively, and $1.0 million
and $0.6 million for the years ended December 31, 2017 and 2016,
respectively. (c) Includes rationalization charges of $0.8 million
and $1.3 million for the fourth quarters of 2017 and 2016,
respectively, and $1.5 million and $6.4 million for the years ended
December 31, 2017 and 2016, respectively. (d) Includes costs
attributed to announced acquisitions of $0.9 million and $1.4
million for the fourth quarters of 2017 and 2016, respectively, and
$24.7 million and $1.4 million for the years ended December 31,
2017 and 2016, respectively.
SILGAN
HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)
For the year ended December 31,
(Dollars in millions)
2017
2016
Cash flows provided by (used in) operating activities: Net
income $ 269.7 $ 153.4
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
178.3
147.2
Rationalization charges 5.8 19.1 Loss on early extinguishment of
debt 7.1 - Stock compensation expense 14.6 13.0 Deferred income tax
(benefit) provision (115.0 ) 45.0
Other changes that provided (used) cash,
net of effects from acquisition:
Trade accounts receivable, net (37.1 ) (10.9 ) Inventories (17.2 )
20.0 Trade accounts payable and other changes, net
83.5 7.8 Net cash
provided by operating activities
389.7
394.6 Cash flows provided by
(used in) investing activities: Purchase of business, net of cash
acquired (1,023.8 ) - Capital expenditures (174.5 ) (191.9 )
Proceeds from asset sales
0.6
11.6 Net cash used in investing activities
(1,197.7 )
(180.3 )
Cash flows provided by (used in) financing activities: Dividends
paid on common stock (40.5 ) (40.9 ) Changes in outstanding checks
- principally vendors 8.9 (22.8 ) Shares repurchased under
authorized repurchase program - (277.3 ) Net borrowings and other
financing activities
868.4
51.5 Net cash provided by (used in) financing
activities
836.8
(289.5 ) Cash and cash equivalents: Net
increase (decrease) 28.8 (75.2 ) Balance at beginning of year
24.7 99.9
Balance at end of year
$ 53.5
$ 24.7 Interest paid, net $
97.6 $ 65.5 Income taxes paid, net of refunds 70.2 58.1
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET INCOME
PER DILUTED SHARE (1) (2)
(UNAUDITED)
For the quarter and year ended December
31,
Table A
Fourth
Quarter
Year
Ended
2017
2016
2017
2016
Net income per diluted share as reported $ 1.31 $ 0.20 $
2.42 $ 1.27 Adjustments: Rationalization charges 0.01 0.03
0.04 0.10 Loss on early extinguishment of debt - - 0.04 - Costs
attributed to announced acquisitions - 0.01 0.15 0.01 Effective tax
rate adjustments
(1.00 )
- (1.00 )
- Adjusted net income per diluted share
$ 0.32 $
0.24 $ 1.65
$ 1.38
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET INCOME
PER DILUTED SHARE (1) (2)
(UNAUDITED)
For the quarter and year ended,
Table B
First
Quarter
Year
Ended
March 31,
December
31,
Estimated
Actual
Estimated
Actual
Low
2018
High
2018
2017
Low
2018
High
2018
2017
Net income per diluted share as estimated
for 2018 and as reported for 2017
$
0.32
$
0.36
$
0.21
$
2.03
$
2.13
$
2.42
Adjustments: Rationalization charges - - - - - 0.04 Loss on
early extinguishment of debt - - 0.02 - - 0.04 Costs attributed to
announced acquisitions - - 0.08 - - 0.15 Effective tax rate
adjustments
- -
- - -
(1.00 )
Adjusted net income per diluted share as
estimated for 2018 and presented for 2017
$
0.32
$
0.36
$
0.31
$
2.03
$
2.13
$
1.65
SILGAN HOLDINGS INC.
RECONCILIATION OF FREE CASH FLOW (2) (3) (UNAUDITED)
For the year ended December 31, (Dollars in millions, except per
share data)
Table C
2017
2016
Net cash provided by operating activities $ 389.7 $ 394.6
Capital expenditures (174.5 ) (191.9 ) Changes in
outstanding checks
8.9
(22.8 ) Free cash flow
$
224.1 $ 179.9
Net cash provided by operating activities per diluted share
$ 3.50 $ 3.27 Free cash flow per diluted share $ 2.01 $ 1.49
Weighted average diluted shares (000’s) 111,363 120,498
(1) The Company has presented adjusted
net income per diluted share for the periods covered by this press
release, which measure is a Non-GAAP financial measure. The
Company’s management believes it is useful to exclude
rationalization charges, costs attributed to announced
acquisitions, the loss on early extinguishment of debt and the
effective tax rate adjustments primarily due to the recently
enacted U.S. Tax Cuts and Jobs Act of 2017 from its net income per
diluted share as calculated under U.S. generally accepted
accounting principles because such Non-GAAP financial measure
allows for a more appropriate evaluation of its operating results.
While rationalization costs are incurred on a regular basis,
management views these costs more as an investment to generate
savings rather than period costs. Costs attributed to announced
acquisitions consist of third party fees and expenses that are
viewed by management as part of the acquisition and not indicative
of the on-going cost structure of the Company. The loss on early
extinguishment of debt consists of third party fees and expenses
incurred or debt costs written off that are viewed by management as
part of the cost of prepayment of debt and not indicative of the
on-going cost structure of the Company. The effective tax rate
adjustments are primarily a result of the impact of the recently
enacted U.S. Tax Cuts and Jobs Act of 2017 principally as a result
of the revaluation of the net deferred tax liabilities at the new
lower estimated corporate tax rate and is viewed by the Company as
a period adjustment that is not indicative of the effective tax
rate of the Company. Such Non-GAAP financial measure is not in
accordance with U.S. generally accepted accounting principles and
should not be considered in isolation but should be read in
conjunction with the unaudited condensed consolidated statements of
income and the other information presented herein. Additionally,
such Non-GAAP financial measure should not be considered a
substitute for net income per diluted share as calculated under
U.S. generally accepted accounting principles and may not be
comparable to similarly titled measures of other companies.
(2) Per share and share amounts have been adjusted for the
two-for-one stock split that occurred on May 26, 2017. (3)
The Company has presented free cash flow in this press release,
which is a Non-GAAP financial measure. The Company’s management
believes that free cash flow is important to support its stated
business strategy of investing in internal growth and acquisitions.
Free cash flow is defined as net cash provided by operating
activities adjusted for changes in outstanding checks and reduced
by capital expenditures. At times, there may be other unusual cash
items that will be excluded from free cash flow. Net cash provided
by operating activities is the most comparable financial measure
under U.S. generally accepted accounting principles to free cash
flow, and it should not be inferred that the entire free cash flow
amount is available for discretionary expenditures. Such Non-GAAP
financial measure is not in accordance with U.S. generally accepted
accounting principles and should not be considered in isolation but
should be read in conjunction with the unaudited condensed
consolidated statements of cash flows and the other information
presented herein. Additionally, such Non-GAAP financial measure
should not be considered a substitute for net cash provided by
operating activities as calculated under U.S. generally accepted
accounting principles and may not be comparable to similarly titled
measures of other companies.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180130006398/en/
Silgan Holdings Inc.Robert B. Lewis,
203-406-3160
Silgan (NASDAQ:SLGN)
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