Highlights
- Volume growth in all segments as customer destocking draws to a
close
- Dispensing and Specialty Closures year-over-year Adjusted EBIT
growth of greater than 20%
- Double digit volume growth in dispensing products
- Announced agreement to acquire Weener Packaging
Silgan Holdings Inc. (NYSE: SLGN), a leading
supplier of sustainable rigid packaging solutions for the world's
essential consumer goods products, today reported second quarter
2024 net sales of $1.38 billion and net income of $76.1 million, or
$0.71 per diluted share, as compared to second quarter 2023 net
sales of $1.43 billion and net income of $78.9 million, or $0.71
per diluted share.
Adjusted net income per diluted share for the second quarter of
2024 was $0.88, after adjustments increasing net income per diluted
share by $0.17. Adjusted net income per diluted share for the
second quarter of 2023 was $0.83 after adjustments increasing net
income per diluted share by $0.12. A reconciliation of net income
per diluted share to "adjusted net income per diluted share," a
Non-GAAP financial measure used by the Company that adjusts net
income per diluted share for certain items, can be found in Table A
at the back of this press release.
“The Silgan team delivered solid second quarter results that
were above the midpoint of our guidance range, as our business
continues to show strength and improving year-over-year trends,”
said Adam Greenlee, President and CEO. “Our global dispensing
business remains a bright spot and continues to benefit from our
market leading innovation, strong end market demand and the
commercialization of new business wins that all contributed to
drive double digit growth for our dispensing products and more than
20% higher Adjusted EBIT in our Dispensing and Specialty Closures
business year-over-year. We are encouraged that volume trends for
our products across our businesses have continued to improve
sequentially and showed positive year-over-year growth in the
second quarter, signaling the conclusion of our food and beverage
customers' destocking activities that began this time last year.
Our Metal Containers business remains well positioned to grow
alongside our long-term customers in the pet food industry, and in
our Custom Containers business we benefited from the early
commercialization of the new business award. Overall, we continue
to see positive year-over-year momentum in our business, and our
long-term strategic priorities remain on track to drive organic
growth and margin improvement in 2024,” continued Mr. Greenlee. “We
have taken action and are confident in our ability to achieve our
two year $50 million cost reduction program that will deliver
earnings growth in 2024 and beyond. We also remain intensely
focused on executing on our strategic objectives and diligent in
our commercial discipline and focus on returns. Finally, as
Silgan’s evolution continues, we are pleased to have recently
announced an agreement to acquire Weener Packaging to further
expand the breadth and reach of our global dispensing business,”
concluded Mr. Greenlee.
Second Quarter Results
Net sales for the second quarter of 2024 were $1.38 billion, a
decrease of $45.3 million, or 3%, as compared to the same period in
the prior year. Second quarter 2024 net sales declined
predominantly as a result of the contractual pass through of lower
raw material costs, mostly in the Metal Containers segment.
Income before interest and income taxes (EBIT) for the second
quarter of 2024 was $141.8 million, a decrease of $2.2 million as
compared to $144.0 million for the second quarter of 2023. EBIT in
the Dispensing and Specialty Closures, Metal Containers and Custom
Containers segments were $78.9 million, $56.3 million, and $20.5
million, respectively, in the second quarter of 2024.
Rationalization charges were $6.9 million and $2.7 million in the
second quarters of 2024 and 2023, respectively. A reconciliation of
EBIT for each segment to Adjusted EBIT, a Non-GAAP financial
measure used by the Company that adjusts EBIT for certain items,
can be found in Table B at the back of this press release.
Interest and other debt expense for the second quarter of 2024
was $41.3 million, a decrease of $5.5 million as compared to the
second quarter of 2023 primarily due to the write-off in the prior
year period of $3.5 million of accrued interest income associated
with a historical acquisition tax indemnity and lower borrowings in
the current year period which more than offset the impact of higher
interest rates.
The effective tax rates were 24.3% and 18.8% for the second
quarters of 2024 and 2023, respectively. The effective tax rate in
the second quarter of 2023 was favorably impacted by the reversal
of tax reserves associated with the same historical acquisition
referred to above.
Second Quarter Segment Results
Dispensing and Specialty Closures Net sales of the Dispensing
and Specialty Closures segment were $565.4 million in the second
quarter of 2024, an increase of $5.3 million, or 1%, as compared to
$560.1 million in the second quarter of 2023. The increase in net
sales from the prior year quarter was a result of higher volume/mix
of 3%, with double digit improvement in dispensing products. The
improvement in volume/mix was partially offset by lower price of 1%
due to the pass through of lower raw materials costs and
unfavorable foreign currency translation of 1%.
Dispensing and Specialty Closures Adjusted EBIT increased $15.8
million to $92.7 million in the second quarter of 2024 as compared
to $76.9 million in the second quarter of 2023. The increase in
Adjusted EBIT was driven by improved price/cost and the impact of
higher volume/mix. Favorable price/cost was driven by improved
manufacturing productivity and the unfavorable impact in the prior
year quarter of labor challenges that limited output at a U.S. food
and beverage closures facility.
Metal Containers Net sales of the Metal Containers segment were
$650.8 million in the second quarter of 2024, a decrease of $60.0
million, or 8%, as compared to $710.8 million in the second quarter
of 2023. The decrease in net sales from the prior year quarter was
primarily a result of lower price/mix driven by the contractual
pass through of lower raw material costs, which was partially
offset by higher unit volume of 1%.
Metal Containers Adjusted EBIT decreased $17.2 million to $58.5
million in the second quarter of 2024 as compared to $75.7 million
in the second quarter of 2023. The decline in Adjusted EBIT in the
quarter was the result of unfavorable price/cost including mix,
primarily due to lower fixed cost absorption as a result of a
significantly lower inventory build due to the previously discussed
reduction in pack plans of a large fruit and vegetable customer to
reduce its working capital.
Custom Containers Net sales of the Custom Containers segment
were $165.2 million in the second quarter of 2024, an increase of
$9.4 million, or 6%, as compared to $155.8 million in the second
quarter of 2023. This increase was primarily the result of higher
volumes of 7%, which was partially driven by earlier than expected
commercialization of new business awards. This increase was
partially offset by lower price/mix and unfavorable foreign
currency translation.
Custom Containers Adjusted EBIT increased $4.0 million to $22.5
million in the second quarter of 2024 as compared to $18.5 million
in the second quarter of 2023. The increase in Adjusted EBIT was
primarily the result of higher volume and more favorable price/cost
including mix.
Outlook for 2024
The Company is confirming its estimate of adjusted net income
per diluted share for the full year of 2024 in the range of $3.55
to $3.75, a 7% increase at the midpoint of the range over adjusted
net income per diluted share of $3.40 in 2023. Volumes in all
segments for 2024 are expected to be higher than 2023 levels.
Adjusted net income per diluted share excludes certain items as
outlined in Table C at the back of this press release and does not
include any contribution from the announced agreement to acquire
Weener Packaging.
The Company anticipates interest and other debt expense in 2024
of approximately $165 million and an effective tax rate for 2024 of
approximately 24 - 25%.
The Company is also confirming its estimate of free cash flow in
2024 of approximately $375 million, as compared to $356.7 million
in 2023. Capital expenditures are expected to be approximately $240
million in 2024.
For the third quarter of 2024, the Company expects low to mid
single digit volume growth in all segments. The Company is
providing an estimate of adjusted net income per diluted share for
the third quarter of 2024 in the range of $1.20 to $1.30, an 8%
increase at the midpoint of the range as compared to $1.16 in the
third quarter of 2023. Adjusted net income per diluted share
excludes certain items as outlined in Table C at the back of this
press release.
Conference Call
Silgan Holdings Inc. will hold a conference call to discuss the
Company’s results for the second quarter of 2024 at 11:00 a.m.
eastern time on Wednesday, July 31, 2024. The conference call audio
will be webcast live, and both the webcast and this press release
can be accessed at www.silganholdings.com. Those who wish to
participate in the conference call via teleconference from the U.S.
and Canada should dial (866) 409-1555 and from outside the U.S. and
Canada should dial (323) 701-0225. The confirmation code for the
conference call is 5158217. The audio webcast can be accessed at
www.silganholdings.com and will be available for 90 days thereafter
for those who are unable to listen to the live call.
* * *
Silgan is a leading supplier of sustainable rigid packaging
solutions for the world's essential consumer goods products with
annual net sales of approximately $6.0 billion in 2023. Silgan
operates 105 manufacturing facilities in North and South America,
Europe and Asia. The Company is a leading worldwide supplier of
dispensing and specialty closures for fragrance and beauty, food,
beverage, personal and health care, home care and lawn and garden
products. The Company is also a leading supplier of metal
containers in North America and Europe for pet and human food and
general line products. In addition, the Company is a leading
supplier of custom 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 2023 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 six months
ended June 30,
(Dollars and shares in millions,
except per share amounts)
Second
Quarter
Six
Months
2024
2023
2024
2023
Net sales
$
1,381.4
$
1,426.7
$
2,698.4
$
2,845.0
Cost of goods sold
1,125.4
1,176.6
2,218.9
2,356.9
Gross profit
256.0
250.1
479.5
488.1
Selling, general and administrative
expenses
107.7
102.1
208.2
203.5
Rationalization charges
6.9
2.7
18.5
6.8
Other pension and postretirement (income)
expense
(0.4
)
1.3
(0.8
)
2.6
Income before interest and income
taxes
141.8
144.0
253.6
275.2
Interest and other debt expense
41.3
46.8
80.0
83.6
Income before income taxes
100.5
97.2
173.6
191.6
Provision for income taxes
24.4
18.3
42.3
40.7
Net income
$
76.1
$
78.9
$
131.3
$
150.9
Earnings per share (EPS):
Basic net income per share
$
0.71
$
0.72
$
1.23
$
1.37
Diluted net income per share
$
0.71
$
0.71
$
1.23
$
1.36
Cash dividends per common share
$
0.19
$
0.18
$
0.38
$
0.36
Weighted average shares:
Basic
106.8
110.1
106.7
110.2
Diluted
107.0
110.5
107.0
110.7
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(Dollars in millions)
June 30,
June 30,
Dec. 31,
2024
2023
2023
Assets:
Cash and cash equivalents
$
302.8
$
236.6
$
642.9
Trade accounts receivable, net
1,056.8
1,067.6
599.5
Inventories
1,005.6
1,251.5
940.8
Other current assets
173.5
142.8
165.7
Property, plant and equipment, net
1,933.6
1,934.2
1,961.6
Other assets, net
3,220.9
3,281.0
3,300.7
Total assets
$
7,693.2
$
7,913.7
$
7,611.2
Liabilities and stockholders' equity:
Current liabilities, excluding debt
$
997.7
$
1,068.2
$
1,431.4
Current and long-term debt
3,929.0
4,162.6
3,426.8
Other liabilities
832.8
811.8
863.6
Stockholders' equity
1,933.7
1,871.1
1,889.4
Total liabilities and stockholders'
equity
$
7,693.2
$
7,913.7
$
7,611.2
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the six months ended June
30,
(Dollars in millions)
2024
2023
Cash flows provided by (used in) operating
activities:
Net income
$
131.3
$
150.9
Adjustments to reconcile net income to net
cash
provided by (used in) operating
activities:
Depreciation and amortization
131.9
131.4
Amortization of debt discount and debt
issuance costs
2.7
2.7
Rationalization charges
18.5
6.8
Other changes that provided (used)
cash:
Trade accounts receivable, net
(474.5
)
(397.4
)
Inventories
(74.5
)
(473.0
)
Trade accounts payable and other changes,
net
(262.3
)
(233.1
)
Net cash (used in) operating
activities
(526.9
)
(811.7
)
Cash flows provided by (used in) investing
activities:
Capital expenditures
(131.4
)
(118.2
)
Proceeds from asset sales
3.0
0.7
Other investing activities
0.1
0.5
Net cash (used in) investing
activities
(128.3
)
(117.0
)
Cash flows provided by (used in) financing
activities:
Dividends paid on common stock
(41.5
)
(40.4
)
Changes in outstanding checks -
principally vendors
(160.6
)
(61.4
)
Shares repurchased under authorized
repurchase program
—
(21.8
)
Net borrowings and other financing
activities
531.0
697.6
Net cash provided by financing
activities
328.9
574.0
Effect of exchange rate changes on cash
and cash equivalents
(13.8
)
5.7
Cash and cash equivalents:
Net (decrease)
(340.1
)
(349.0
)
Balance at beginning of year
642.9
585.6
Balance at end of period
$
302.8
$
236.6
SILGAN HOLDINGS INC.
CONSOLIDATED SUPPLEMENTAL
SEGMENT FINANCIAL DATA
(UNAUDITED)
For the quarter and six months
ended June 30,
(Dollars in millions)
Second
Quarter
Six
Months
2024
2023
2024
2023
Net sales:
Dispensing and Specialty Closures
$
565.4
$
560.1
$
1,101.3
$
1,140.0
Metal Containers
650.8
710.8
1,267.9
1,381.0
Custom Containers
165.2
155.8
329.2
324.0
Consolidated
$
1,381.4
$
1,426.7
$
2,698.4
$
2,845.0
Income before interest and income taxes
(EBIT)
Dispensing and Specialty Closures
$
78.9
$
63.7
$
138.7
$
134.7
Metal Containers
56.3
73.6
98.0
121.4
Custom Containers
20.5
17.0
38.3
35.4
Corporate
(13.9
)
(10.3
)
(21.4
)
(16.3
)
Consolidated
$
141.8
$
144.0
$
253.6
$
275.2
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET
INCOME PER DILUTED SHARE (1)
(UNAUDITED)
For the quarter and six months
ended June 30,
(Dollars and shares in millions,
except per share amounts)
Table
A
Second
Quarter
Six
Months
2024
2023
2024
2023
Net
Diluted
Net
Diluted
Net
Diluted
Net
Diluted
Income
EPS
Income
EPS
Income
EPS
Income
EPS
U.S. GAAP net income and diluted EPS
$
76.1
$
0.71
$
78.9
$
0.71
$
131.3
$
1.23
$
150.9
$
1.36
Adjustments (a)
17.9
0.17
12.8
0.12
35.8
0.33
27.2
0.25
Non-U.S. GAAP adjusted net income and
adjusted diluted EPS
$
94.0
$
0.88
$
91.7
$
0.83
$
167.1
$
1.56
$
178.1
$
1.61
Weighted average number of common shares
outstanding - Diluted
107.0
110.5
107.0
110.7
(a) Adjustments consist of items in the
table below
Second
Quarter
Six
Months
2024
2023
2024
2023
Adjustments:
Acquired intangible asset amortization
expense
$
12.3
$
13.3
$
25.6
$
26.5
Other pension (income) expense for U.S.
pension plans
(1.2
)
0.8
(2.4
)
1.7
Rationalization charges
6.9
2.7
18.5
6.8
Costs attributed to announced
acquisitions
5.5
—
5.5
—
Pre-tax impact of adjustments
23.5
16.8
47.2
35.0
Tax impact of adjustments
5.6
4.0
11.4
7.8
Net impact of adjustments
$
17.9
$
12.8
$
35.8
$
27.2
Weighted average number of common shares
outstanding - Diluted
107.0
110.5
107.0
110.7
Diluted EPS impact from adjustments
$
0.17
$
0.12
$
0.33
$
0.25
Adjusted tax rate
24.2
%
19.6
%
24.3
%
21.4
%
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED
EBIT (2)
(UNAUDITED)
For the quarter and six months
ended June 30,
(Dollars in millions)
Table
B
Second
Quarter
Six
Months
2024
2023
2024
2023
Dispensing and Specialty
Closures:
Income before interest and income taxes
(EBIT)
$
78.9
$
63.7
$
138.7
$
134.7
Acquired intangible asset amortization
expense
10.9
11.8
22.6
23.6
Other pension (income) expense for U.S.
pension plans
(0.3
)
0.2
(0.5
)
0.3
Rationalization charges
3.2
1.2
9.7
1.3
Adjusted EBIT
$
92.7
$
76.9
$
170.5
$
159.9
Metal Containers:
Income before interest and income taxes
(EBIT)
$
56.3
$
73.6
$
98.0
$
121.4
Acquired intangible asset amortization
expense
0.3
0.3
0.7
0.6
Other pension (income) expense for U.S.
pension plans
(0.6
)
0.3
(1.3
)
0.7
Rationalization charges
2.5
1.5
6.1
5.4
Adjusted EBIT
$
58.5
$
75.7
$
103.5
$
128.1
Custom Containers:
Income before interest and income taxes
(EBIT)
$
20.5
$
17.0
$
38.3
$
35.4
Acquired intangible asset amortization
expense
1.1
1.2
2.3
2.3
Other pension (income) expense for U.S.
pension plans
(0.3
)
0.3
(0.6
)
0.7
Rationalization charges
1.2
—
2.7
0.1
Adjusted EBIT
$
22.5
$
18.5
$
42.7
$
38.5
Corporate:
(Loss) before interest and income taxes
(EBIT)
$
(13.9
)
$
(10.3
)
$
(21.4
)
$
(16.3
)
Costs attributed to announced
acquisitions
5.5
—
5.5
—
Adjusted EBIT
$
(8.4
)
$
(10.3
)
$
(15.9
)
$
(16.3
)
Total adjusted EBIT
$
165.3
$
160.8
$
300.8
$
310.2
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET
INCOME PER DILUTED SHARE (1)
(UNAUDITED)
For the quarter and year
ended,
(Dollars and shares in millions,
except per share amounts)
Table
C
Third
Quarter,
Year
Ended
September
30,
December
31,
Estimated
Actual
Estimated
Actual
Low
High
Low
High
2024
2024
2023
2024
2024
2023
U.S. GAAP net income as estimated for
2024
and as reported for 2023
$
113.2
$
123.9
$
110.6
$
314.4
$
335.8
$
326.0
Adjustments (a)
15.3
15.3
15.2
65.8
65.8
45.5
Non-U.S. GAAP adjusted net income as
estimated for 2024 and presented for 2023
$
128.5
$
139.2
$
125.8
$
380.2
$
401.6
$
371.5
U.S. GAAP diluted EPS as estimated for
2024
and as reported for 2023
$
1.06
$
1.16
$
1.02
$
2.94
$
3.14
$
2.98
Adjustments (a)
0.14
0.14
0.14
0.61
0.61
0.42
Non-U.S. GAAP adjusted diluted EPS as
estimated for 2024 and presented for 2023
$
1.20
$
1.30
$
1.16
$
3.55
$
3.75
$
3.40
(a) Adjustments consist of items in the
table below
Third
Quarter,
Year
Ended
September 30,
December
31,
2024
2023
2024
2023
Estimated
Actual
Estimated
Actual
Adjustments:
Acquired intangible asset amortization
expense
$
12.3
$
13.3
$
50.3
$
53.1
Other pension (income) expense for U.S.
pension plans
(1.2
)
0.6
(4.9
)
3.6
Rationalization charges
2.1
6.4
21.7
8.4
Costs attributed to announced
acquisitions
7.0
—
20.0
—
Pre-tax impact of adjustments
20.2
20.3
87.1
65.1
Tax impact of adjustments
4.9
5.1
21.3
19.6
Net impact of adjustments
$
15.3
$
15.2
$
65.8
$
45.5
Weighted average number of common shares
outstanding - Diluted
107.1
108.8
107.1
109.2
Diluted EPS impact from adjustments
$
0.14
$
0.14
$
0.61
$
0.42
(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 acquired intangible asset amortization
expense, other pension (income) expense for U.S. pension plans,
rationalization charges and costs attributed to announced
acquisitions 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. Acquired intangible asset amortization
expense is a non-cash expense related to acquired operations that
management believes is not indicative of the on-going performance
of the acquired operations. Since the Company's U.S. pension plans
are significantly over funded and have no required cash
contributions for the foreseeable future based on current
regulations, management views other pension (income) expense from
the Company's U.S. pension plans, which excludes service costs, as
not reflective of the operational performance of the Company or its
segments. 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. 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) The Company has presented adjusted EBIT 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 acquired intangible asset amortization expense, other
pension (income) expense for U.S. pension plans, rationalization
charges and costs attributed to announced acquisitions from EBIT
for the Company and each of its segments as calculated under U.S.
generally accepted accounting principles because such Non-GAAP
financial measure allows for a more appropriate evaluation of
operating results. Acquired intangible asset amortization expense
is a non-cash expense related to acquired operations that
management believes is not indicative of the on-going performance
of the acquired operations. Since the Company's U.S. pension plans
are significantly over funded and have no required cash
contributions for the foreseeable future based on current
regulations, management views other pension (income) expense from
the Company's U.S. pension plans, which excludes service costs, as
not reflective of the operational performance of the Company or its
segments. 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. 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 income before
interest and income taxes (EBIT) 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: https://www.businesswire.com/news/home/20240731898352/en/
Alexander Hutter Vice President, Investor Relations
AHutter@silgan.com 203-406-3187
Silgan (NYSE:SLGN)
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