AptarGroup, Inc. (NYSE:ATR) today reported record third quarter
net income and earnings per share.
Third Quarter 2015 Summary
- Strong operating results across each
business segment drove the consolidated operating income margin to
15% compared to 12% in the prior year
- Record third quarter earnings per
share of $0.83 rose 30% when compared to currency-adjusted prior
year earnings per share of $0.64, and rose 14% when compared to
reported prior year earnings per share of $0.73
- Core sales, which exclude currency
translation effects, increased approximately 3% (reported sales
decreased 10%)
THIRD QUARTER RESULTS
For the quarter ended September 30, 2015, reported sales
decreased 10% to $586 million from $652 million a year ago. Core
sales, which exclude the negative impact from changes in currency
exchange rates, increased by approximately 3%.
Third Quarter Segment Sales Analysis
(Change Over Prior Year)
Beauty + Food +
Total Home Pharma
Beverage AptarGroup Sales Growth Before
Currency Effects (Core Sales) (1%) 10% 3% 3% Currency Effects (1)
(14%) (12%) (8%)
(13%) Total Reported Sales Growth (15%) (2%)
(5%) (10%) (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 an excellent quarter and quite similar to our
second quarter record performance. Our Beauty + Home segment
performed very well operationally despite continued softness in the
personal care and beauty markets, a challenging foreign currency
environment and a general deceleration in the developing regions.
Our Pharma and Food + Beverage segments each had outstanding
quarters as well, with broad-based demand for our innovative
dispensing solutions. Food + Beverage’s core sales growth was
negatively impacted by decreased tooling sales and the passing
through of resin cost decreases. Excluding resin and tooling
effects, Food + Beverage core product sales increased approximately
13%. Operating profit margins improved at each segment compared to
the prior year and I’m pleased to see the impact of our cost saving
efforts across the company.”
AptarGroup reported earnings per share of $0.83 compared to
$0.73 per share a year ago. Assuming a comparable foreign currency
exchange environment, comparable earnings per share for the prior
year were approximately $0.64.
YEAR-TO-DATE RESULTS
For the nine months ended September 30, 2015, reported sales
decreased 11% to approximately $1.8 billion from approximately $2.0
billion a year ago. Core sales, which exclude the negative impact
from changes in currency exchange rates, increased by approximately
1%.
Nine 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) (3%) 8% 3% 1% Currency Effects (1)
(13%) (14%) (7%)
(12%) Total Reported Sales Growth (16%) (6%)
(4%) (11%) (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, “Currency
translation headwinds significantly affected our year-to-date
reported results compared to the prior year. Despite softness in
certain markets and the passing through of resin cost decreases,
our core sales improved over the prior year. We continue to focus
on cost containment while we grow in the various markets we serve
and this approach, along with a favorable mix of business, drove
our strong operating results through the first nine months of this
year.”
AptarGroup reported earnings per share of $2.41 compared to
$2.21 a year ago. Excluding the effect of a change in inventory
valuation methods made in the second quarter (approximately $0.08
per share), adjusted earnings per share for the nine months
year-to-date were $2.33. Assuming a comparable foreign currency
exchange environment, comparable earnings per share for the prior
year were approximately $1.90.
OUTLOOK
Commenting on AptarGroup’s outlook, Hagge said, “Currency
exchange rates will continue to be a significant headwind on our
translated results compared to the prior year at least until early
next year. We don’t see any significant changes in the
macroeconomic conditions that are currently affecting our business,
including selected softness in certain markets. Also, we anticipate
that certain customers may choose to reduce inventory levels at
year end as we have seen in recent years. Despite these near-term
issues, we expect fourth quarter earnings on a comparable currency
basis to improve over the prior year. In addition, we are
optimistic about the future and we remain committed to our
market-focused strategy, investing in research and development, and
positioning the company for long-term growth.”
AptarGroup expects earnings per share for the fourth quarter,
assuming a comparable effective tax rate as the prior year fourth
quarter, to be in the range of $0.61 to $0.66 per share compared to
$0.63 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 $0.58.
SHARE REPURCHASE PROGRAM AND INCREASED CASH DIVIDEND
As planned, AptarGroup concluded a previously announced $250
million accelerated share repurchase program near the end of the
third quarter and received approximately 720,000 additional shares.
This brings the total amount of shares repurchased under the
program to approximately 3,853,000 shares. Also, as previously
announced, AptarGroup increased the quarterly cash dividend by 7%
to $0.30 per share. The payment date is November 25, 2015, to
shareholders of record as of November 4, 2015. Hagge stated, “Our
strong financial condition allows us to continue to invest in our
business and return value to shareholders through share repurchases
and increased cash dividends.”
OPEN CONFERENCE CALL
There will be a conference call on Friday, October 30, 2015 at
8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss
AptarGroup’s third 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
for a limited time 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. To learn more, 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-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 Nine Months Ended September 30,
September 30,
2015
2014
2015
2014
Net Sales $ 586,290 $ 651,942 $ 1,770,376 $ 1,998,624 Cost
of Sales (exclusive of depreciation shown below) 381,424 443,520
1,142,681 1,347,982 Selling, Research & Development and
Administrative 81,370 91,649 266,869 294,809 Depreciation and
Amortization
35,439
38,158 103,664
113,871 Operating Income 88,057 78,615
257,162 241,962 Other Income/(Expense): Interest Expense (8,948 )
(5,332 ) (25,446 ) (15,459 ) Interest Income 1,762 1,386 4,598
3,449 Equity in results of affiliates (209 ) (124 ) (735 ) (1,868 )
Miscellaneous, net
(1,285 )
(429 ) (2,752
) (582 ) Income
before Income Taxes 79,377 74,116 232,827 227,502 Provision for
Income Taxes
26,115
25,496 76,925
77,390 Net Income $ 53,262 $ 48,620 $ 155,902 $
150,112 Net (Income)/Loss Attributable to Noncontrolling
Interests
(15 )
(25 ) 55
(52 ) Net Income Attributable to
AptarGroup, Inc.
$ 53,247
$ 48,595 $
155,957 $ 150,060
Net Income Attributable to AptarGroup, Inc. Per Common
Share: Basic
$ 0.85 $
0.75 $ 2.49
$ 2.30 Diluted
$
0.83 $ 0.73
$ 2.41 $
2.21 Average Numbers of Shares
Outstanding: Basic 62,885 64,886 62,627 65,225 Diluted 64,454
66,845 64,609 67,761
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued) (In Thousands)
CONSOLIDATED BALANCE SHEETS
September 30, 2015
December 31, 2014 ASSETS Cash and Equivalents $ 434,059 $
399,762 Short-term Investments
67,053
- Total Cash and Equivalents, and Short-term
Investments 501,112 399,762 Receivables, net 422,895 406,976
Inventories 310,844 311,072 Other Current Assets
97,651 96,128 Total Current Assets
1,332,502 1,213,938 Net Property, Plant and Equipment 773,203
811,655 Goodwill, net 316,382 329,741 Other Assets
69,665 81,856 Total Assets
$ 2,491,752 $
2,437,190 LIABILITIES AND EQUITY
Short-Term Obligations $ 72,748 $ 251,976 Accounts Payable and
Accrued Liabilities
365,460
352,762 Total Current Liabilities 438,208 604,738
Long-Term Obligations 763,731 588,892 Deferred Liabilities
129,909 139,644 Total Liabilities
1,331,848 1,333,274 AptarGroup, Inc. Stockholders' Equity
1,159,606 1,103,407 Noncontrolling Interests in Subsidiaries
298 509 Total Equity
1,159,904 1,103,916 Total
Liabilities and Equity
$ 2,491,752
$ 2,437,190 APTARGROUP,
INC. Condensed Consolidated Financial Statements
(Unaudited) (continued) (In Thousands)
SEGMENT
INFORMATION Three
Months Ended Nine Months Ended September 30,
September 30,
2015
2014
2015
2014
NET SALES
Beauty + Home $ 321,638 $ 378,905 $ 970,176 $ 1,155,367 Pharma
175,427 179,191 537,396 569,230 Food + Beverage
89,225 93,846
262,804 274,027
Total Net Sales $ 586,290
$ 651,942 $
1,770,376 $ 1,998,624
SEGMENT INCOME
(1)
Beauty + Home $ 27,961 $ 25,399 $ 78,529 $ 80,378 Pharma 52,941
49,314 160,404 154,589 Food + Beverage 13,236 11,713 37,277 33,209
Corporate and Other
(7,575 )
(8,364 )
(22,535 ) (28,664
) Total Income Before Interest and Taxes $ 86,563 $
78,062 $ 253,675 $ 239,512 Interest Expense, Net
(7,186 ) (3,946
) (20,848 )
(12,010 ) Income before Income
Taxes $ 79,377 $
74,116 $ 232,827
$ 227,502
SEGMENT INCOME AS %
OF NET SALES
Beauty + Home 8.7 % 6.7 % 8.1 % 7.0 % Pharma 30.2 % 27.5 % 29.8 %
27.2 % Food + Beverage 14.8 % 12.5 % 14.2 % 12.1 % 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.
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AptarGroup, Inc.Matthew DellaMaria815-477-0424
AptarGroup (NYSE:ATR)
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