AptarGroup, Inc. (NYSE:ATR) today reported record fourth quarter
and annual net income and earnings per share.
Summary
- Reported record annual and fourth
quarter net income and earnings per share despite foreign currency
headwinds.
- Reported earnings per share rose 8% for
the year and fourth quarter over prior year levels.
- Comparable adjusted earnings per share
increased 21% for the year and 18% in the fourth quarter over prior
year levels.
- Improved operating margins across each
business segment drove adjusted EBITDA(1) margin to 20% for 2015
compared to 18% in the prior year (19% in the fourth quarter
compared to 17% in the prior year fourth quarter).
- Achieved adjusted ROIC(2) of 14% for
2015 compared to 13% in the prior year.
- Paid increased annual dividends for the
22nd consecutive year (current annualized dividend is $1.20 per
share).
- Fourth quarter adjusted earnings per
share were $0.67 compared to currency-adjusted earnings per share
of $0.57 in the prior year (fourth quarter 2015 adjusted earnings
per share exclude a positive impact of $0.03 per share ($2.9
million of pre-tax income) related to a gain on an insurance
recovery, and a negative impact of $0.02 per share ($1.9 million of
pre-tax expense) related to costs associated with the Mega Airless
acquisition).
(1) Adjusted EBITDA is earnings excluding unusual items before net
interest, taxes, depreciation and amortization; see “Presentation
of Non-GAAP Information” and accompanying tables for further
information. (2) ROIC is return on invested capital calculated by
taking adjusted after-tax EBIT (earnings before net interest and
taxes) and dividing it by average net capital; see “Presentation of
Non-GAAP Information” and accompanying tables for further
information.
Fourth Quarter Results
For the quarter ended December 31, 2015, reported sales
decreased 9% to $547 million from $599 million a year ago. Core
sales, which exclude impacts from changes in currency exchange
rates, increased by approximately 1%.
Fourth Quarter Segment Sales Analysis
(Change Over Prior Year)
Beauty +
Home
Pharma
Food +
Beverage
Total
AptarGroup
Sales Growth Before Currency Effects (Core Sales) (1%) 6%
(1%) 1% Currency Effects (1) (11%) (10%)
(6%) (10%) Total Reported Sales Growth (12%)
(4%) (7%) (9%) (1) - Currency effects are
approximated by translating last year's amounts at this year's
foreign exchange rates.
Commenting on the quarter, Stephen Hagge, President and CEO,
said, “Despite several challenging conditions, including softness
in several markets, we performed very well operationally. We
achieved record fourth quarter earnings driven by operating margin
improvements across each business segment compared to a year ago.
Our Beauty + Home segment continued to see softness in the personal
care market although we were encouraged to see year over year
quarterly core sales increase in the beauty market for the first
time in 2015. Our Pharma segment had another excellent quarter,
driven by strong demand for our delivery solutions for the
prescription drug and injectables markets that offset weak demand
from the consumer healthcare market. Our Food + Beverage segment
was negatively impacted by beverage demand seasonality. While we
continued to benefit from lower input costs, we also remained
focused on containing costs and improving operating efficiencies
across each segment. These factors drove adjusted EBITDA margin to
19 percent and resulted in comparable adjusted earnings per share
growth of 18 percent.”
AptarGroup reported earnings per share of $0.68 compared to
$0.63 per share a year ago. Excluding unusual items from the
current period and assuming a comparable foreign currency exchange
environment, comparable earnings per share would have been $0.67
compared to $0.57 for the prior year. A reconciliation of adjusted
earnings per diluted share to the most directly comparable GAAP
measure is provided in the tables that accompany this press
release.
Annual Results
For the year ended December 31, 2015, reported sales decreased
11% to approximately $2.3 billion from $2.6 billion a year ago.
Core sales, which exclude impacts from changes in currency exchange
rates, increased by approximately 1%.
Annual Segment Sales Analysis
(Change Over Prior Year)
Beauty +
Home
Pharma
Food +
Beverage
Total
AptarGroup
Sales Growth Before Currency Effects (Core Sales) (2%) 8%
2% 1% Currency Effects (1) (13%) (13%)
(7%) (12%) Total Reported Sales Growth (15%) (5%)
(5%) (11%) (1) - Currency effects are
approximated by translating last year's amounts at this year's
foreign exchange rates.
Hagge commented on the annual results, “It was a challenging
year with sluggish macroeconomic conditions, foreign currency
translation headwinds and softness in several key markets. Even
though we faced these issues, we grew the top line on a core basis,
adapted to the softer market conditions with a company-wide focus
on cost containment and benefited from lower input costs. As a
result, we achieved an adjusted EBITDA margin of 20 percent, return
on invested capital of 14 percent and grew comparable adjusted
earnings per share by 21 percent. We also executed our balanced
capital allocation strategy and completed our accelerated share
repurchase program, increased our dividend and announced a
strategic acquisition just after the end of the year.”
AptarGroup reported earnings per share of $3.09 compared to
$2.85 a year ago. Excluding exceptional items from the current
period and assuming a comparable foreign currency exchange
environment, comparable earnings per share would have been $3.00
compared to $2.48 for the prior year. A reconciliation of adjusted
earnings per diluted share to the most directly comparable GAAP
measure is provided in the tables that accompany this press
release.
Outlook
Commenting on AptarGroup’s outlook, Hagge said, “We don’t
anticipate significant changes in the various macro challenges that
we are facing in the coming quarter. The foreign currency exchange
environment is expected to have a negative impact on our reported
results. We will remain flexible to adapt to changing market
conditions with a continued focus on containing costs while we
invest in innovation and new solutions that are designed to help
our customers grow their businesses. We also look forward to
closing the Mega Airless transaction and moving forward with our
plans to grow our expanded airless platform globally.”
AptarGroup expects earnings per share for the first quarter,
excluding any impacts from costs associated with the Mega Airless
acquisition, to be in the range of $0.69 to $0.74 per share
compared to $0.70 per share reported in the prior year. Assuming a
comparable foreign currency exchange rate environment, comparable
earnings per share for the prior year would have been approximately
$0.68 per share.
Open Conference Call
There will be a conference call on Friday, February 5, 2016 at
8:00 a.m. Central Time to discuss AptarGroup’s fourth quarter and
annual results for 2015. 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. A replay of
the conference call can also be accessed on the Investor Relations
page of the website.
AptarGroup, Inc. is a leading global supplier of a broad range
of innovative dispensing solutions for the beauty, personal care,
home care, prescription drug, consumer health care, injectables,
food, and beverage markets. AptarGroup is headquartered in Crystal
Lake, Illinois, with manufacturing facilities in North America,
Europe, Asia and South America. For more information, visit
www.aptar.com.
Presentation of Non-GAAP Information
This press release refers to certain non-GAAP financial
measures, including adjusted earnings per share, adjusted EBITDA
and adjusted ROIC, which exclude the impact of costs related to an
acquisition and a gain from an insurance recovery that were
recorded in the fourth quarter of 2015, and income from a change in
the method of valuing inventory (from LIFO to FIFO) that was
recorded in the second quarter of 2015. Comparable adjusted
earnings per share also excludes the impact of foreign currency
effects. Non-GAAP financial measures may not be comparable to
similarly titled non-GAAP financial measures provided by other
companies. AptarGroup's management believes it is useful to present
these non-GAAP financial measures because they allow for a better
period over period comparison of operating results by removing the
impact of items that, in management’s view, do not reflect
AptarGroup’s core operating performance. These non-GAAP financial
measures should not be considered in isolation or as a substitute
for GAAP financial results, but should be read in conjunction with
the unaudited condensed consolidated statements of income and other
information presented herein. A reconciliation of each non-GAAP
financial measure to the most directly comparable GAAP measure is
included in the accompanying tables.
This press release contains forward-looking statements. Words
such as “expects,” “anticipates,” “believes,” “estimates,” “future”
and other similar expressions or future or conditional verbs such
as “will,” “should,” “would” and “could” are intended to identify
such forward-looking statements. Forward-looking statements are
made pursuant to the safe harbor provisions of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934 and are based on management’s beliefs as well as
assumptions made by and information currently available to
management. Accordingly, AptarGroup’s 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 including, but not limited to, the ability to complete the
Mega Airless acquisition; economic conditions worldwide as well as
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 raw materials, components and other input costs; the
availability of raw materials and components; 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 AptarGroup’s filings with
the Securities and Exchange Commission, including its Form 10-Ks
and Form 10-Qs. AptarGroup undertakes 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 Year Ended December 31,
December 31,
2015
2014
2015
2014
Net Sales $ 546,773 $ 599,185 $ 2,317,149 $ 2,597,809 Cost
of Sales (exclusive of depreciation shown below) (1) 359,969
407,284 1,502,650 1,755,266 Selling, Research & Development and
Administrative (2) 84,592 89,100 351,461 383,909 Depreciation and
Amortization
35,229
38,347 138,893
152,218 Operating Income 66,983 64,454
324,145 306,416 Other Income/(Expense): Interest Expense (9,169 )
(5,570 ) (34,615 ) (21,029 ) Interest Income 998 1,348 5,596 4,797
Equity in results of affiliates 17 (49 ) (718 ) (1,917 )
Miscellaneous, net (3)
2,915
(1,384 ) 163
(1,966 ) Income before Income
Taxes 61,744 58,799 294,571 286,301 Provision for Income Taxes
18,351 17,287
95,276 94,677
Net Income $ 43,393 $ 41,512 $ 199,295 $ 191,624 Net Loss
Attributable to Noncontrolling Interests
(2
) 86 53
34 Net Income Attributable to
AptarGroup, Inc.
$ 43,391
$ 41,598 $
199,348 $ 191,658
Net Income Attributable to AptarGroup, Inc. Per Common
Share: Basic
$ 0.69 $
0.65 $ 3.19
$ 2.95 Diluted
$
0.68 $ 0.63
$ 3.09 $
2.85 Average Numbers of Shares
Outstanding: Basic 62,461 64,368 62,585 65,009 Diluted 64,266
66,121 64,492 67,292
Notes to Condensed Consolidated Financial
Statements:
(1) Cost of Sales for the year ended December 31, 2015 included
approximately $7.4 million of income related to a change in
inventory valuation methodology recorded in the second quarter of
2015. (2) Selling, Research & Development and Administrative
for the quarter and year ended December 31, 2015 included
approximately $1.9 million of costs related to the Mega Airless
acquisition. (3) Miscellaneous, net for the quarter and year ended
December 31, 2015 included approximately $2.9 million of gain on an
insurance recovery.
AptarGroup, Inc. Condensed
Consolidated Financial Statements (Unaudited) (continued) (In
Thousands)
Consolidated Balance Sheets
December 31, 2015 December 31, 2014
ASSETS Cash and Equivalents $ 489,901 $ 399,762 Short-term
Investments
29,816 - Total
Cash and Equivalents, and Short-term Investments 519,717 399,762
Receivables, net 377,038 406,976 Inventories 294,912 311,072 Other
Current Assets
88,795
96,128 Total Current Assets 1,280,462 1,213,938 Net
Property, Plant and Equipment 765,383 811,655 Goodwill, net 310,240
329,741 Other Assets
68,109
81,856 Total Assets
$
2,424,194 $ 2,437,190
LIABILITIES AND EQUITY Short-Term Obligations $ 56,972 $
251,976 Accounts Payable and Accrued Liabilities
340,396 352,762 Total Current
Liabilities 397,368 604,738 Long-Term Obligations 762,524 588,892
Deferred Liabilities
114,596
139,644 Total Liabilities 1,274,488 1,333,274
AptarGroup, Inc. Stockholders' Equity 1,149,411 1,103,407
Noncontrolling Interests in Subsidiaries
295
509 Total Equity
1,149,706
1,103,916 Total Liabilities and Equity
$ 2,424,194 $
2,437,190 AptarGroup, Inc. Condensed
Consolidated Financial Statements (Unaudited) (continued) (In
Thousands)
Segment Information Three Months
Ended Year Ended December 31,
December 31,
2015
2014
2015
2014
NET SALES
Beauty + Home $ 302,770 $ 342,930 $ 1,272,946 $ 1,498,297 Pharma
174,824 181,996 712,220 751,226 Food + Beverage
69,179 74,259
331,983 348,286
Total Net Sales $ 546,773
$ 599,185 $
2,317,149 $ 2,597,809
SEGMENT INCOME
(1)
Beauty + Home $ 20,178 $ 17,990 $ 98,707 $ 98,368 Pharma 50,105
50,109 210,509 204,698 Food + Beverage 5,454 4,519 42,731 37,728
Corporate and Other (2)
(5,822 )
(9,597 )
(28,357 ) (38,261
) Total Income Before Interest and Taxes $ 69,915 $
63,021 $ 323,590 $ 302,533 Interest Expense, Net
(8,171 ) (4,222
) (29,019 )
(16,232 ) Income before Income
Taxes $ 61,744 $
58,799 $ 294,571
$ 286,301
SEGMENT INCOME AS %
OF NET SALES
Beauty + Home 6.7 % 5.2 % 7.8 % 6.6 % Pharma 28.7 % 27.5 % 29.6 %
27.2 % Food + Beverage 7.9 % 6.1 % 12.9 % 10.8 % Notes to Condensed
Consolidated Financial Statements: (1) The Company evaluates
performance of its business units and allocates resources based
upon segment income, defined as earnings before net interest
expense, certain corporate expenses and income taxes. (2) Corporate
and Other for the quarter and year ended December 31, 2015 included
approximately $1.9 million of costs related to the Mega Airless
acquisition and approximately $2.9 million of gain on an insurance
recovery, and the year ended December 31, 2015 also included
approximately $7.4 million of income related to a change in
inventory valuation methodology recorded in the second quarter of
2015.
AptarGroup, Inc. Reconciliation of Adjusted EBIT
and Adjusted EBITDA to Net Income (Unaudited) (In Thousands)
Three Months Ended Year Ended December 31,
December 31,
2015
2014
2015
2014
Reported net income $ 43,393 $
41,512 $ 199,295 $ 191,624
Reported income taxes 18,351
17,287 95,276
94,677 Reported income before income
taxes 61,744 58,799 294,571 286,301
Adjustments: Change in inventory valuation method (from LIFO to
FIFO) (7,427 ) Costs associated with Mega Airless acquisition 1,892
1,892 Gain on insurance recovery (2,900 )
(2,900 ) Adjusted earnings before
income taxes 60,736 58,799 286,136 286,301 Interest expense 9,169
5,570 34,615 21,029 Interest income (998 )
(1,348 ) (5,596 ) (4,797 ) Adjusted
earnings before net interest and taxes (Adjusted EBIT) 68,907
63,021 315,155 302,533 Depreciation and amortization 35,229
38,347 138,893
152,218 Adjusted earnings before net interest,
taxes, depreciation and amortization (Adjusted EBITDA) $ 104,136
$ 101,368 $ 454,048 $
454,751 Adjusted EBITDA margin (Adjusted EBITDA /
Reported Net Sales) 19 % 17 % 20 % 18 % Adjusted earnings
before net interest and taxes (Adjusted EBIT) $ 315,155 $ 302,533
Effective income tax rate (reported income taxes / reported income
before income taxes) 32.3 % 33.1 % Taxes on
Adjusted EBIT 101,795 100,138
Adjusted EBIT After Taxes $ 213,360 $ 202,395
AptarGroup, Inc. Reconciliation of Capital to
Stockholders' Equity (Unaudited) (In Thousands)
2015
2014
Total AptarGroup, Inc. Stockholders' Equity $
1,149,411 $ 1,103,407 Long-term
obligations 762,524 588,892 Short-term
obligations 56,972 251,976
1,968,907 1,944,275 Less: Cash and
equivalents, and short-term investments 519,717
399,762 Total Capital $ 1,449,190
$ 1,544,513
Average Capital (average of
beginning of year and end of year capital) $ 1,496,852 $
1,604,496 Adjusted EBIT After Taxes $ 213,360 $ 202,395 ROIC
(Adjusted EBIT After Taxes / Average Capital) 14 % 13 %
AptarGroup, Inc. Reconciliation of Adjusted Earnings Per
Diluted Share (Unaudited) Three Months Ended
Year Ended December 31, December 31,
2015
2014
2015
2014
Net Income Attributable to AptarGroup, Inc. Per Diluted
Share $ 0.68 $ 0.63 $ 3.09 $ 2.85
Adjustments
(1):
Cost related to the Mega Airless acquisition 0.02 0.02 Gain on an
insurance recovery (0.03 ) (0.03 ) Income from change in inventory
valuation method (0.08 ) Foreign currency effects (2)
(0.06 ) (0.37 ) Adjusted
Earnings Per Diluted Share $ 0.67 $ 0.57
$ 3.00 $ 2.48 (1) Tax
effects of the after-tax adjustments noted above are as follows:
Three Months Ended Year Ended December 31, December 31,
2015
2014
2015
2014
Cost related to the Mega Airless acquisition $ 0.01 $ 0.01 Gain on
an insurance recovery $ (0.01 ) $ (0.01 ) Income from change in
inventory valuation method $ (0.03 ) Foreign currency effects $
(0.02 ) $ (0.18 ) (2) Foreign currency effects are
approximations of the adjustment necessary to state the prior year
earnings per share using current period exchange rates.
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version on businesswire.com: http://www.businesswire.com/news/home/20160204006667/en/
AptarGroup, Inc.Matthew DellaMaria815-477-0424
AptarGroup (NYSE:ATR)
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