AptarGroup, Inc. (NYSE:ATR) today announced increased revenue,
net income and earnings per share for the first quarter of 2017. In
addition, AptarGroup announced its continued investment in the
field of connected electronic drug delivery devices.
First Quarter Summary
- Reported sales grew 3%; growth in
Beauty + Home and Pharma offset decline in Food + Beverage
- Excluding the negative impact from
changes in foreign currency exchange rates and the positive
contribution from an acquisition, core sales also increased
3%
- Reported earnings per share were
$0.81, which includes a $0.04 tax benefit not included in previous
first quarter guidance, compared to $0.67 in the prior year (+21%);
when adjusting for special items and changes in currency exchange
rates, comparable earnings per share for the prior year were $0.74
(+9%)
- Earnings per share for both the
current and prior year included certain tax benefits amounting to
approximately $0.04 in each respective period
- Received the first order for
European Medicines Agency (EMA)-approved integrated electronic
nasal lockout device (Aptar’s eLockout)
- Acquired 20% minority
ownership position in Kali Care, a Silicon Valley-based technology
company, which provides digital monitoring systems for ophthalmic
medications
First Quarter Results
For the quarter ended March 31, 2017, reported sales increased
3% to $601 million from $582 million a year ago. Core sales, which
exclude the negative impact from changes in currency exchange rates
and the positive contribution from the Mega Airless acquisition,
also increased by 3%.
First Quarter Segment Sales Analysis
(Change Over Prior Year)
Beauty + Food + Total Home
Pharma Beverage AptarGroup Core Sales Growth 1% 10%
(1%) 3% Acquisitions 3% 1% -- 2% Currency Effects (1) (1%)
(3%) (2%) (2%) Total Reported Sales Growth 3%
8% (3%) 3%
(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 core sales growth after a
challenging second half of 2016. The diversity of our business
continues to be a key strength. Our Pharma segment had an excellent
quarter with growth across all three of its markets. The destocking
effect that we saw at the end of 2016 appears to be over and we saw
more normalized order levels in the prescription market and strong
demand in the consumer health care market for decongestants and
ophthalmics. We also achieved core sales growth in our Beauty +
Home segment and were able to offset continuing challenges in the
U.S. market with growth in the other regions. Our Beauty + Home and
Food + Beverage segments were negatively affected by rising raw
material costs, and our Food + Beverage segment was further
impacted by lower sales volumes in the Chinese beverage
market.”
Aptar reported earnings per share of $0.81 compared to $0.67 per
share a year ago. Comparable adjusted earnings per share for the
first quarter of 2016 totaled $0.74 per share.
Continued Investment in Connected Electronic Drug Delivery
Devices
In the quarter, Aptar received an order for the first integrated
electronic nasal lockout device (Aptar’s eLockout) approved by the
EMA following a multi-year development with Takeda Pharmaceuticals
International AG. This represents a major milestone, with the
eLockout device being the first and only fully integrated
electronic nasal drug delivery device to be approved by a European
regulatory authority. The Aptar eLockout device uses advanced
electronic technology that facilitates safe patient compliance by
limiting the number of doses available during a 24 hour period and
features a child-resistant cap.
In addition, Aptar signed an agreement to acquire a 20% minority
ownership position in Kali Care, a Silicon Valley-based technology
company, which provides digital-monitoring systems for ophthalmic
medications. Kali Care’s sensing technology allows clinicians to
collect real time compliance data. For example, the ability to see
the medication-adherence score of patients with glaucoma is a
powerful tool for ophthalmologists in managing the care of their
patients. Aptar’s leading dispensing technologies combined with
Kali Care’s smart sensors, data analytics and cloud services has
the potential to become a valuable solution for clinicians. In
2016, we announced our partnership with Propeller Health, a leading
digital platform for respiratory health management, to develop a
fully-integrated connected metered dose inhaler (cMDI) that
combines electronic sensing, dose counting and wireless
communicating capabilities.
Commenting on the strategy, Tanda explained, “This is an
important step in our journey to leverage our leading drug delivery
technologies to develop the next generation of connected electronic
devices. These strategic collaborations underline Aptar’s
commitment to breaking new ground with health care
innovations.”
Outlook
Commenting on Aptar’s outlook, Tanda said, “Looking to the
second quarter, we currently expect growth in our Pharma and Food +
Beverage segments. Our Beauty + Home segment may be impacted by
uncertainties, including the pace of economic growth in the U.S.
and Brazil. I am optimistic that we will continue to grow each of
our business segments over the long-term by executing on customer
projects and developing new business. I am also excited to continue
to meet with our customers and visit our facilities as we focus on
key areas such as innovation, sales, marketing and business
development and pursue further growth opportunities.”
Aptar expects earnings per share for the second quarter to be in
the range of $0.92 to $0.97 compared to $0.91 per share reported in
the prior year. Our guidance range is based on an effective tax
rate range of 26.5% to 27.5% which includes an estimate of a
potential tax benefit from our adoption of the new accounting
standard for share-based compensation. Adjusting for changes in
foreign currency exchange rates, comparable adjusted earnings per
share for the prior year were approximately $0.87.
Cash Dividend
As previously reported, the Board of Directors declared a
quarterly cash dividend of $0.32 per share. The payment date is May
24, 2017, to stockholders of record as of May 3, 2017.
Open Conference Call
There will be a conference call on Friday, April 28, 2017 at
8:00 a.m. Central Time to discuss Aptar’s first 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. Aptar 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; 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,
2017
2016
Net Sales $ 601,316 $ 582,338 Cost of Sales (exclusive of
depreciation and amortization shown below) (1) 384,932 374,203
Selling, Research & Development and Administrative (2) 101,516
103,015 Depreciation and Amortization
37,331
35,887 Operating Income 77,537
69,233 Other Income/(Expense): Interest Expense (8,262 ) (8,591 )
Interest Income 330 584 Equity in Results of Affiliates (48 ) (121
) Miscellaneous, net
(77 )
(1,260 ) Income before Income Taxes
69,480 59,845 Provision for Income Taxes
17,675
15,979 Net Income $ 51,805 $
43,866 Net Loss/(Income) Attributable to Noncontrolling
Interests
15 (3
) Net Income Attributable to AptarGroup, Inc.
$ 51,820 $
43,863 Net Income Attributable to AptarGroup,
Inc. per Common Share: Basic
$ 0.83
$ 0.70 Diluted
$ 0.81 $
0.67 Average Numbers of Shares
Outstanding: Basic 62,355 62,722 Diluted 64,234 65,063
Notes to the Condensed Consolidated
Financial Statements:
(1) For the quarter ended March
31, 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 quarter ended March 31, 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
March 31,
2017
December 31,
2016
ASSETS Cash and Equivalents $ 284,727 $ 466,287 Receivables,
net 474,957 433,127 Inventories 309,592 296,914 Other Current
Assets
87,458 73,842 Total
Current Assets 1,156,734 1,270,170 Net Property, Plant and
Equipment 798,630 784,321 Goodwill 411,272 407,522 Other Assets
157,003 144,772 Total
Assets
$ 2,523,639 $
2,606,785 LIABILITIES AND EQUITY
Short-Term Obligations $ 9,938 $ 173,816 Accounts Payable and
Accrued Liabilities
402,993
369,139 Total Current Liabilities 412,931 542,955
Long-Term Obligations 771,291 772,737 Deferred Liabilities
98,800 116,851 Total Liabilities
1,283,022 1,432,543 AptarGroup, Inc. Stockholders' Equity
1,240,338 1,173,950 Noncontrolling Interests in Subsidiaries
279 292 Total Equity
1,240,617 1,174,242 Total
Liabilities and Equity
$ 2,523,639
$ 2,606,785 AptarGroup, Inc.
Reconciliation of Adjusted EBIT and Adjusted EBITDA to Net
Income (Unaudited) (In Thousands)
Three Months Ended March 31, 2017 Beauty +
Food + Corporate & Consolidated Home Pharma
Beverage Other Net Interest
Net Sales
$ 601,316 322,448 196,912 81,956 - -
Reported net income $ 51,805 Reported
income taxes 17,675
Reported income
before income taxes 69,480 22,208 59,070
7,140 (11,006 ) (7,932 )
Adjustments: None
Adjusted earnings before income taxes
69,480 22,208 59,070 7,140 (11,006 ) (7,932 ) Interest expense
8,262 8,262 Interest income (330 )
(330 ) Adjusted
earnings before net interest and taxes (Adjusted EBIT) 77,412
22,208 59,070 7,140 (11,006 ) - Depreciation and amortization
37,331 19,880
9,771 5,806 1,874
- Adjusted earnings before net interest,
taxes, depreciation and amortization (Adjusted EBITDA) $ 114,743
$ 42,088 $ 68,841 $
12,946 $ (9,132 ) $ - Segment
income margins (Income before income taxes / Reported Net Sales)
6.9 % 30.0 % 8.7 % Adjusted EBITDA margins (Adjusted EBITDA /
Reported Net Sales) 19.1 % 13.1 % 35.0 % 15.8 % 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:
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 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 (Income before income taxes /
Reported Net Sales) 7.5 % 29.1 % 10.9 % Adjusted EBITDA margins
(Adjusted EBITDA / Reported Net Sales) 19.2 % 14.3 % 34.4 % 17.8 %
AptarGroup, Inc. Reconciliation of Adjusted Earnings Per
Diluted Share (Unaudited) ($ in thousands, except per share
information) Three Months Ended March 31,
2017
2016
Income before Income Taxes $ 69,480
$ 59,845
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) (1,540 )
Adjusted Income before Income Taxes $ 69,480 $ 66,522
Provision for Income Taxes $
17,675 $ 15,979
Adjustments:
Transaction costs related to the Mega Airless acquisition 1,483
Purchase accounting adjustments related to Mega Airless inventory
859 Foreign currency effects (1) (331 )
Adjusted Provision for Income Taxes $ 17,675 $ 17,990
Net (Income)/Loss Attributable to
Noncontrolling Interests $ 15 $ (3
) Net Income Attributable to AptarGroup, Inc.
$ 51,820 $ 43,863
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) (1,209 )
Adjusted Net Income Attributable to AptarGroup, Inc. $ 51,820
$ 48,529
Average Number of Diluted Shares
Outstanding 64,234 65,063 Net Income
Attributable to AptarGroup, Inc. Per Diluted Share $
0.81 $ 0.67
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) (0.02 )
Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted
Share $ 0.81 $ 0.74
(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 June 30,
Expected
2017
2016
Income before Income Taxes $ 84,358
Adjustments:
Foreign currency effects (1) (3,156 ) Adjusted Income before
Income Taxes $ 81,202
Provision for Income
Taxes $ 25,307
Adjustments:
Foreign currency effects (1) (791 ) Adjusted Provision for
Income Taxes $ 24,516
Net (Income)/Loss
Attributable to Noncontrolling Interests $ (3
) Net Income Attributable to AptarGroup, Inc.
$ 59,048
Adjustments:
Foreign currency effects (1) (2,365 ) Adjusted Net Income
Attributable to AptarGroup, Inc. $ 56,683
Average
Number of Diluted Shares Outstanding 64,785
Net Income Attributable to AptarGroup, Inc. Per Diluted Share
(2) $0.92 - $0.97
$ 0.91
Adjustments:
Foreign currency effects (1) (0.04 ) Adjusted
Net Income Attributable to AptarGroup, Inc. Per Diluted Share (2)
$0.92 - $0.97 $ 0.87
(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
March 31, 2017.
(2) AptarGroup’s expected earnings per
share range for the second quarter of 2017 is based on an effective
tax rate range of 26.5% to 27.5% which includes an estimate of a
potential impact from our adoption of the new accounting standard
for share-based compensation.
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AptarGroup, Inc.Investor Relations
Contact:Matthew
DellaMariamatt.dellamaria@aptar.com815-477-0424orMedia Contact:Katie
Reardonkatie.reardon@aptar.com815-477-0424
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