AptarGroup, Inc. (NYSE:ATR) today announced record quarterly
earnings per share on both a reported basis and also after
excluding the effect of a change in inventory valuation
methods.
Second Quarter 2015 Summary
- Improved operating margins across
each segment drove record earnings per share
- Reported earnings per share rose to
a record $0.90 compared to $0.79 reported in the prior
year
- Second quarter pre-tax earnings
included a positive impact of approximately $7.4 million
(approximately $0.08 per share after-tax) related to a change in
accounting for certain inventories from the last in, first out
(LIFO) method to the first in, first out (FIFO) method
- Excluding the effects of the change
to the FIFO inventory valuation method, earnings per share were
$0.82 compared to prior year currency-adjusted earnings per share
of $0.68
- Excluding currency translation
effects, core sales increased approximately 2% (reported sales
decreased 11%)
SECOND QUARTER RESULTS
For the quarter ended June 30, 2015, reported sales decreased
11% to $594 million from $671 million a year ago. Excluding the
negative impact from changes in currency exchange rates, core sales
increased by approximately 2%.
Second Quarter Segment Sales Analysis
(Change Over Prior Year)
Beauty +
Food + Total Home Pharma Beverage
AptarGroup Sales Growth Before Currency Effects (Core
Sales) (4 %) 9 % 9 % 2 % Currency Effects (1) (13 %)
(15 %) (7 %) (13 %) Total Reported
Sales Growth (17 %) (6 %) 2 %
(11 %)
(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, “This was a strong quarter that once again reflected our
ability to successfully execute our strategy. We offer a broad
portfolio of dispensing solutions to a variety of end markets.
Increases in demand across multiple markets drove volumes higher in
our Pharma and Food + Beverage segments. This offset some weakness
in certain markets served by our Beauty + Home segment. In
addition, currency headwinds affected each business segment.”
Hagge continued, “I’m pleased that each of our segments reported
improved operating margins compared to the prior year and that we
achieved our highest level of quarterly earnings per share. We
continue to successfully implement new customer projects while we
maintain our focus on cost containment across all three of our
business segments. This focus along with volume increases drove the
strong operating margins in our Pharma and Food + Beverage
segments. Our Beauty + Home segment did a terrific job of remaining
responsive to our customers’ needs as we navigated through soft
market conditions while pulling the right levers to improve the
operating margin.”
During the second quarter of 2015, AptarGroup changed the method
of valuing inventories at two U.S. locations that used the last in,
first out (“LIFO”) method to the first in, first out (“FIFO”)
method. With this change, all inventories are now valued using the
FIFO method which more closely reflects current costs. The impact
of the change resulted in pre-tax income in the second quarter of
approximately $7.4 million, or approximately $0.08 per diluted
share.
AptarGroup reported earnings per share of $0.90 compared to
$0.79 per share a year ago. Excluding the effect of the inventory
valuation method change, earnings per share were $0.82. Assuming a
comparable foreign currency exchange rate environment, comparable
earnings per share for the prior year were approximately $0.68.
YEAR-TO-DATE RESULTS
For the six months ended June 30, 2015, reported sales decreased
12% to approximately $1.18 billion from approximately $1.35 billion
a year ago. Excluding the negative impact from changes in currency
exchange rates, core sales were approximately equal to the prior
year.
Six Months Year-to-Date Segment Sales Analysis
(Change Over Prior Year)
Beauty + Food +
Total Home Pharma
Beverage AptarGroup Sales Growth Before Currency
Effects (Core Sales) (4 %) 8 % 2 % --
Currency Effects (1)
(12 %) (15 %) (6 %) (12
%) Total Reported Sales Growth (16 %) (7 %)
(4 %) (12 %)
(1) - Currency effects are approximated by translating last
year's amounts at this year's foreign exchange rates.
Hagge commented on the year-to-date results, “Our reported
figures through the first half of the year include significant
negative translation effects stemming from the strong U.S. dollar
relative to a year ago. When we exclude currency translation
effects, our core sales were approximately equal to the prior year.
Certain markets served by our Beauty + Home business remained soft
through the first half but this was offset by the continued strong
performance of our Pharma segment and the improvement in sales in
our Food + Beverage segment.”
AptarGroup reported earnings per share of $1.59 compared to
$1.49 per share a year ago. Excluding the effect of the inventory
valuation method change made in the second quarter, earnings per
share were $1.51. Assuming a comparable foreign currency exchange
rate environment, comparable earnings per share for the prior year
were approximately $1.27.
OUTLOOK
Commenting on AptarGroup’s outlook, Hagge said, “We are looking
forward to building upon the progress we’ve made thus far this
year. We are committed to investing in research and development and
in the capital projects necessary to support our long-term growth.
Certain macro-economic conditions could remain challenging in the
near-term, including the stagnation affecting certain markets in
Latin America and the global foreign exchange environment. However,
we will stay focused and execute our strategy and in doing so,
continue to help our customers grow their businesses with our
innovative dispensing solutions.”
AptarGroup expects earnings per share for the third quarter to
be in the range of $0.77 to $0.82 compared to $0.73 per share
reported in the prior year. Assuming a comparable foreign currency
exchange rate environment, comparable earnings per share for the
prior year were approximately $0.65.
CASH DIVIDEND
As previously reported, the Board declared on July 16, 2015, a
quarterly dividend of $0.28 per share, payable August 19, 2015 to
shareholders of record as of July 29, 2015.
OPEN CONFERENCE CALL
There will be a conference call on Wednesday, July 29, 2015 at
7:00 a.m. Central Time to discuss AptarGroup’s second quarter
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. 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 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-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 Six Months Ended
June 30, June 30,
2015
2014
2015
2014
Net Sales $ 594,275 $ 670,631 $ 1,184,086 $ 1,346,682 Cost
of Sales (exclusive of depreciation shown below) 375,278 451,051
761,257 904,462 Selling, Research & Development and
Administrative 89,312 96,486 185,499 203,160 Depreciation and
Amortization
34,165
38,466 68,225
75,713 Operating Income 95,520 84,628 169,105
163,347 Other Income/(Expense): Interest Expense (9,195 ) (5,246 )
(16,498 ) (10,127 ) Interest Income 1,105 1,047 2,836 2,063 Equity
in results of affiliates (407 ) (198 ) (526 ) (1,744 )
Miscellaneous, net
(1,268 )
(525 ) (1,467
) (153 ) Income
before Income Taxes 85,755 79,706 153,450 153,386 Provision for
Income Taxes
28,214
26,622 50,810
51,894 Net Income $ 57,541 $ 53,084 $ 102,640 $
101,492 Net (Income)/Loss Attributable to Noncontrolling
Interests
(2 )
(8 ) 70
(27 ) Net Income Attributable to
AptarGroup, Inc.
$ 57,539
$ 53,076 $
102,710 $ 101,465
Net Income Attributable to AptarGroup, Inc. Per Common
Share: Basic
$ 0.92 $
0.81 $ 1.64
$ 1.55 Diluted
$
0.90 $ 0.79
$ 1.59 $
1.49 Average Numbers of Shares
Outstanding: Basic 62,697 65,328 62,496 65,397 Diluted 64,276
67,438 64,603 68,042
APTARGROUP, INC. Condensed
Consolidated Financial Statements (Unaudited) (continued) (In
Thousands)
CONSOLIDATED BALANCE SHEETS
June 30, 2015 December 31, 2014 ASSETS Cash and
Equivalents $ 391,810 $ 399,762 Short-term Investments
66,897 - Total Cash and
Equivalents, and Short-term Investments 458,707 399,762
Receivables, net 435,448 406,976 Inventories 315,178 311,072 Other
Current Assets
102,258
96,128 Total Current Assets 1,311,591 1,213,938 Net
Property, Plant and Equipment 776,636 811,655 Goodwill, net 316,480
329,741 Other Assets
73,099
81,856 Total Assets
$
2,477,806 $ 2,437,190
LIABILITIES AND EQUITY Short-Term Obligations $ 23,888 $
251,976 Accounts Payable and Accrued Liabilities
377,569 352,762 Total Current
Liabilities 401,457 604,738 Long-Term Obligations 813,007 588,892
Deferred Liabilities
135,652
139,644 Total Liabilities 1,350,116 1,333,274
AptarGroup, Inc. Stockholders' Equity 1,127,399 1,103,407
Noncontrolling Interests in Subsidiaries
291
509 Total Equity
1,127,690
1,103,916 Total Liabilities and Equity
$ 2,477,806 $
2,437,190 APTARGROUP, INC. Condensed
Consolidated Financial Statements (Unaudited) (continued) (In
Thousands)
SEGMENT INFORMATION
Three Months Ended Six Months Ended June 30,
June 30,
2015 2014
2015 2014
NET SALES
Beauty + Home $ 319,124 $ 385,226 $ 648,539 $ 776,462 Pharma
183,300 195,690 361,969 390,039 Food + Beverage
91,851 89,715
173,578 180,181
Total Net Sales $ 594,275
$ 670,631 $
1,184,086 $ 1,346,682
SEGMENT INCOME
(1)
Beauty + Home $ 27,193 $ 27,198 $ 50,569 $ 54,979 Pharma 55,462
52,793 107,463 105,275 Food + Beverage 14,991 12,416 24,041 21,496
Corporate and Other
(3,801 )
(8,502 )
(14,961 ) (20,300
) Total Income Before Interest and Taxes $ 93,845 $
83,905 $ 167,112 $ 161,450 Interest Expense, Net
(8,090 ) (4,199
) (13,662 )
(8,064 ) Income before Income
Taxes $ 85,755 $
79,706 $ 153,450
$ 153,386
SEGMENT INCOME AS %
OF NET SALES
Beauty + Home 8.5 % 7.1 % 7.8 % 7.1 % Pharma 30.3 % 27.0 % 29.7 %
27.0 % Food + Beverage 16.3 % 13.8 % 13.9 % 11.9 % 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
income taxes.
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AptarGroup, Inc.Matthew DellaMaria, 815-477-0424
AptarGroup (NYSE:ATR)
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