AptarGroup, Inc. (NYSE:ATR) today reported record fourth quarter
and annual earnings per share.
Fourth Quarter 2014 Summary
- Reported earnings per share
increased 17% to a record $0.63 per share compared to $0.54 per
share in the prior year
- Comparable earnings per share for
the prior year, neutralizing exceptional items and currency
effects, were $0.59
- Reported sales declined 6% on
foreign currency exchange rate headwinds and soft demand in certain
markets
- Sales excluding currency effects
rose 1% over the prior year
- Pharma segment delivered excellent
results
- Beauty + Home segment sales were
impacted by soft demand in several markets
- Food + Beverage segment sales
decreased primarily due to inventory destocking by certain
customers
- Executed Accelerated Share
Repurchase program
FOURTH QUARTER RESULTS
For the quarter ended December 31, 2014, reported sales
decreased 6% to $599 million from $637 million a year ago.
Excluding the negative impact from changes in currency exchange
rates, core sales increased by 1%.
Fourth Quarter Segment Sales Analysis
(Change Over Prior Year)
Beauty +
Food + Total Home
Pharma
Beverage AptarGroup Sales Growth Before Currency
Effects (Core Sales) -1% 6% -3% 1% Currency Effects -7% -7%
-3% -7% Total Reported Sales Growth -8% -1%
-6% -6%
Commenting on the quarter, Stephen Hagge, President and CEO,
said, “Despite certain headwinds, we were able to achieve core
sales growth in the quarter. Our Pharma segment continued to
perform very well with core sales growth in each market and
geographic region. This strength offset some anticipated softness
in certain markets served by our Beauty + Home and Food + Beverage
segments. Specifically, sales to the beauty market declined
globally primarily due to weak demand in the fragrance sector.
Sales to the beverage markets in Asia and the U.S. were also down
compared to a year ago principally due to some inventory destocking
following exceptionally strong orders in the third quarter. We also
reported a slight decline in custom tooling sales.”
Hagge continued, “Although the currency exchange rate
environment was unfavorable and certain markets were soft, we
achieved record reported earnings per share, in part, due to the
strong performance of our Pharma segment. This again speaks to the
strength of our diversified business and our ability to offer
exceptional solutions and service to multiple markets and
geographies. Weaker sales volumes negatively impacted the margins
of our Beauty + Home and Food + Beverage segments. In addition, our
Beauty + Home segment recognized $1.3 million of expenses in the
fourth quarter related to the Brazilian facility fire of last year.
These specific expenses are expected to be reimbursed in future
periods by insurance proceeds which will be recognized in the
period they are realizable in accordance with accounting
rules.”
AptarGroup reported earnings per share of $0.63 compared to
$0.54 per share a year ago. Assuming a comparable foreign currency
exchange rate environment and excluding exceptional items,
comparable earnings per share for the prior year were $0.59. A
reconciliation of the prior year fourth quarter adjusted net income
per diluted share is provided in the tables that accompany this
press release.
YEAR-TO-DATE RESULTS
For the year ended December 31, 2014, reported sales increased
3% to approximately $2.6 billion from $2.5 billion a year ago.
Excluding the negative impact from changes in currency exchange
rates, core sales increased by 5%.
Annual Segment Sales Analysis
(Change Over Prior Year)
Beauty + Food + Total Home
Pharma Beverage AptarGroup Sales Growth Before
Currency Effects (Core Sales) 3% 7% 9% 5% Currency Effects -2%
-1% -1% -2% Total Reported Sales Growth 1%
6% 8% 3%
Hagge commented on the annual results, “I am pleased by the
growth this year when you consider the different issues we faced
including softer macroeconomic conditions and inventory destocking
in certain markets. We remained focused on our customers and
meeting their dispensing needs and, consequently, we reported our
highest level of annual sales. We completed the year with increased
core sales in each business segment, end-market and geographic
region. Earnings growth was under pressure, particularly within our
Beauty + Home segment, as we had certain start-up costs related to
our expansion in Latin America, negative currency transaction
effects and the negative impact on margins from softer volumes at
different times throughout the year. However, strong results from
our Pharma and Food + Beverage segments drove record annual
earnings per share. We ended the year in great financial condition
and in December we executed an accelerated share repurchase
program.”
AptarGroup reported earnings per share of $2.85 compared to
$2.52 a year ago. Assuming a comparable foreign currency exchange
rate environment and excluding exceptional items, comparable
earnings per share for the prior year were $2.67. A reconciliation
of the prior year adjusted net income per diluted share is provided
in the tables that accompany this press release.
OUTLOOK
Commenting on AptarGroup’s outlook, Hagge said, “We currently
anticipate that certain foreign currency exchange rates, especially
with the Euro, will continue to be a significant headwind on our
translated results. Also, the soft demand in select markets that we
saw in the fourth quarter could continue into the first quarter and
make for difficult comparisons to our strong performance a year
ago. We will continue to focus on the areas of our business that we
can control, including cost containment, improving operational
efficiencies and investing in new solutions that bring value to our
customers and end consumers around the globe.”
AptarGroup expects earnings per share for the first quarter to
be in the range of $0.60 to $0.65 per share compared to $0.71 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 $0.60 per
share.
ACCELERATED SHARE REPURCHASE PROGRAM AND CASH
DIVIDEND
As previously reported, AptarGroup entered into an agreement to
repurchase approximately $250 million of its common stock under an
accelerated share repurchase program (the “ASR program”). The ASR
program is part of AptarGroup’s $350 million share repurchase
authorization announced in October of 2014. In December of 2014,
AptarGroup paid $250 million to Wells Fargo Bank N.A. in exchange
for approximately 3.1 million shares, at that time estimated to
represent approximately 80% of the total number of shares expected
to be purchased in the ASR program based on current market prices.
The ultimate number of shares to be repurchased under the ASR
program will be based on the volume-weighted average price of
AptarGroup’s common stock during the term of the ASR program, less
a discount. Also as previously reported, the Board declared a
quarterly cash dividend of $0.28 per share. The payment date is
February 18, 2015, to stockholders of record as of January 28,
2015.
OPEN CONFERENCE CALL
There will be a conference call on Friday, February 6, 2015 at
8:00 a.m. Central Time to discuss AptarGroup’s fourth quarter and
annual results for 2014. 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 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.
This press release contains forward-looking statements. Words
such as “expects,” “anticipates,” “believes,” “estimates,” 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, economic, environmental or
political conditions in the various markets and countries in which
AptarGroup operates; 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
Company’s ability to increase prices, contain costs and improve
productivity; changes in capital availability or cost, including
interest rate fluctuations; the competitive marketplace; fiscal and
monetary policies and other regulations; inflationary pressures and
changes in foreign currency exchange rates; direct or indirect
consequences of acts of war or terrorism; and labor relations. 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-K’s and Form 10-Q’s. Readers are
cautioned not to place undue reliance on forward-looking
statements. 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,
2014
2013
2014
2013
Net Sales $ 599,185 $ 637,295 $ 2,597,809 $ 2,520,013 Cost
of Sales (exclusive of depreciation shown below) 407,284 435,088
1,755,266 1,708,936 Selling, Research & Development and
Administrative 89,100 95,412 383,909 364,747 Depreciation and
Amortization (1) 38,347 37,949 152,218 149,956 Restructuring
Initiatives
- 3,042
- 11,800
Operating Income 64,454 65,804 306,416 284,574 Other
Income/(Expense): Interest Expense (5,570 ) (5,150 ) (21,029 )
(20,514 ) Interest Income 1,348 962 4,797 3,233 Equity in results
of affiliates (49 ) (274 ) (1,917 ) (883 ) Miscellaneous, net
(1,384 ) (957
) (1,966 )
(2,027 ) Income before Income Taxes
58,799 60,385 286,301 264,383 Provision for Income Taxes
17,287 23,549
94,677 92,457 Net
Income $ 41,512 $ 36,836 $ 191,624 $ 171,926 Net Loss
Attributable to Noncontrolling Interests
86
63 34
68 Net Income Attributable to
AptarGroup, Inc.
$ 41,598
$ 36,899 $
191,658 $ 171,994
Net Income Attributable to AptarGroup, Inc. Per Common
Share: Basic
$ 0.65 $
0.56 $ 2.95
$ 2.60 Diluted
$
0.63 $ 0.54
$ 2.85 $
2.52 Average Numbers of Shares
Outstanding: Basic 64,368 65,700 65,009 66,090 Diluted 66,121
67,853 67,292 68,208 (1) Depreciation and Amortization for
the quarter and year ended December 31, 2013 included approximately
$1.2 million and $2.7 million, respectively, of accelerated
depreciation related to the European restructuring plan.
APTARGROUP, INC. Condensed Consolidated Financial
Statements (Unaudited) (continued) (In Thousands)
CONSOLIDATED BALANCE SHEETS
December 31, 2014 December 31, 2013 ASSETS Cash and
Equivalents $ 399,762 $ 309,861 Receivables, net 406,976 438,221
Inventories 311,072 353,159 Other Current Assets
96,128 97,170 Total Current Assets
1,213,938 1,198,411 Net Property, Plant and Equipment 811,655
864,662 Goodwill, net 329,741 358,865 Other Assets
80,531 75,824 Total Assets
$ 2,435,865 $
2,497,762 LIABILITIES AND EQUITY
Short-Term Obligations $ 251,976 $ 139,770 Accounts Payable and
Accrued Liabilities
352,762
403,051 Total Current Liabilities 604,738 542,821
Long-Term Obligations 588,892 354,814 Deferred Liabilities
136,112 119,819 Total Liabilities
1,329,742 1,017,454 AptarGroup, Inc. Stockholders' Equity
1,105,614 1,479,757 Noncontrolling Interests in Subsidiaries
509 551 Total Equity
1,106,123 1,480,308 Total
Liabilities and Equity
$ 2,435,865
$ 2,497,762 APTARGROUP,
INC. Condensed Consolidated Financial Statements
(Unaudited) (continued) (In Thousands)
SEGMENT
INFORMATION Three
Months Ended Year Ended December 31, December 31,
2014
2013
2014
2013
NET SALES
Beauty + Home $ 342,930 $ 373,638 $ 1,498,297 $ 1,488,145 Pharma
181,996 184,704 751,226 708,774 Food + Beverage
74,259 78,953
348,286 323,094
Total Net Sales $ 599,185
$ 637,295 $
2,597,809 $ 2,520,013
SEGMENT INCOME
(1)
Beauty + Home $ 17,990 $ 23,575 $ 98,368 $ 109,272 Pharma 50,109
48,535 204,698 189,689 Food + Beverage 4,519 7,084 37,728 35,186
Restructuring Initiatives & Related Depreciation (2) - (4,268 )
- (14,525 ) Corporate and Other
(9,597
) (10,353 )
(38,261 ) (37,958
) Total Income Before Interest and Taxes $ 63,021 $
64,573 $ 302,533 $ 281,664 Interest Expense, Net
(4,222 ) (4,188
) (16,232 )
(17,281 ) Income before Income
Taxes $ 58,799 $
60,385 $ 286,301
$ 264,383
SEGMENT INCOME AS %
OF NET SALES
Beauty + Home 5.2 % 6.3 % 6.6 % 7.3 % Pharma 27.5 % 26.3 % 27.2 %
26.8 % Food + Beverage 6.1 % 9.0 % 10.8 % 10.9 % 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, restructuring initiatives and
related depreciation, and income taxes. (2) - Restructuring
Initiatives & Related Depreciation includes the following
income/(expense) items: Three Months Ended Year Ended
December 31, December 31,
Depreciation:
2014
2013
2014
2013
European Restructuring Plan $ - $ (1,226 ) $ - $ (2,725 )
Restructuring
Initiatives:
European Restructuring Plan - (3,042 ) - (11,844 ) Other
Initiatives $ - $ - $ - $ 44
Total Restructuring Initiatives & Related Depreciation
$ - $
(4,268 ) $ -
$ (14,525 )
Reconciliation of Adjusted Net Income Per Diluted Share (1)
(Unaudited) Three
Months Ended Year Ended December 31, December 31,
2014
2013
2014
2013
Net Income Attributable to AptarGroup, Inc. Per Diluted
Share $ 0.63 $ 0.54 $ 2.85 $ 2.52
Adjustments:
Net effect of items included in the Provision for Income Taxes (2)
0.05 Charges related to restructuring initiatives (3) 0.05 0.17
Foreign currency effects (3) (4) (0.05 )
(0.02 ) Adjusted Net Income Per
Diluted Share $ 0.63 $ 0.59 $ 2.85
$ 2.67 (1) AptarGroup has presented
adjusted net income per diluted share for the prior year periods
covered by this press release, which measure is a Non-GAAP
financial measure. AptarGroup's management believes it is useful to
exclude the impact of certain tax related items including charges
related to French tax regulation and certain other tax items that
were recorded in the fourth quarter of 2013 and restructuring
charges that were recorded in the fourth quarter and year 2013 from
the calculation of net income per diluted share under U.S.
generally accepted accounting principles (GAAP) because such
Non-GAAP financial measure allows for a better comparison of
operating results. This Non-GAAP financial measure should not be
considered in isolation or as a substitute for net income per
diluted share as calculated under GAAP, but should be read in
conjunction with the unaudited condensed consolidated statements of
income and other information presented herein. (2) - Items
included in the Provision for Income Taxes include an impact of
$0.07 per share related to French tax regulation that was enacted
in December 2013, and ($0.02) per share related to certain foreign
tax benefits that did not repeat in 2014. (3) - Tax effects
of the after-tax adjustments noted above are as follows:
Three Months Ended Year Ended December 31, December
31,
2014
2013
2014
2013
Restructuring initiatives $ 0.01 $ 0.05 Foreign currency effects $
(0.02 ) $ (0.01 ) (4) - Foreign currency effects are
approximations of the adjustment necessary to state the prior year
earnings per share using current period exchange rates.
AptarGroup, Inc.Matthew DellaMaria, 815-477-0424
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