Exhibit 99.1
AptarGroup Reports Record Results Driven by Strong Pharma Business;
Declares Dividend
CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--October 15, 2008--AptarGroup, Inc. (NYSE:ATR) today reported record third quarter results mainly due to the strength of the Company’s Pharma segment. AptarGroup’s Board of Directors also declared a quarterly dividend of $.15 per share.
Third Quarter 2008 Summary
- Earnings per share rose to record of $.57 per share
- Sales increased 10% to $532.2 million
- Pharma segment continued strong performance
- Challenging economic environment pressured results of Beauty & Home and Closures segments
- Strong balance sheet maintained in a tightening credit market
THIRD QUARTER RESULTS
For the quarter ended September 30, 2008, sales increased 10% to $532.2 million, up from $485.7 million a year ago. Changes in exchange rates accounted for 7% of the growth while product sales contributed 3%.
Commenting on the quarter, Peter Pfeiffer, President and CEO, said, “In spite of the challenging economic environment, we reported another quarter of record sales and profits. This underscores the strength of our business model; one that offers a broad range of innovative dispensing systems to a diverse group of industries throughout many geographic regions.”
| Third Quarter Segment Sales Analysis |
| (Growth Over Prior Year) |
| | | | | | | |
| Beauty &
Home | | Closures | | Pharma | | Total
AptarGroup |
| Product and Custom Tooling Sales | -1 | % | | 6 | % | | 10 | % | | 3 | % |
| Currency Effects | 6 | % | | 7 | % | | 7 | % | | 7 | % |
| Total Growth | 5 | % | | 13 | % | | 17 | % | | 10 | % |
Operating income increased to $59.2 million, up 3% from $57.4 million a year ago primarily due to the strength of the Pharma segment. Pharma segment income (income before interest expense net of interest income, stock option and corporate expenses, income taxes and unusual items) increased 17% to $34.4 million driven by increased demand for the Company’s metered dose inhaler valves and nasal pumps. Beauty & Home segment income declined 15% to $21.7 million primarily due to under absorbed overhead associated with sluggish demand from the personal care and fragrance/cosmetic markets and rising global input costs. Closures segment income was approximately equal to the prior year’s level reflecting the softness in the personal care and household markets in Europe and rising global input costs.
In 2007, the Company reported third quarter diluted earnings per share of $.56 per share that included a positive impact of $.03 per share related to a reduction in net deferred tax liabilities stemming from a change in the German tax law. Excluding this deferred tax adjustment, diluted earnings per share in the third quarter of 2007 were $.53 per share. For the third quarter of 2008, the Company reported diluted earnings per share of $.57 per share. Pfeiffer added, “This was a challenging quarter considering the weakening overall business environment particularly in the U.S. and Europe. Our Beauty & Home and Closures operations experienced underutilized capacity that was caused by softer demand and, at the same time, had to face rising costs. However, our business is well balanced between different segments, end markets, and global regions. The strong performance of our Pharma segment and lower net interest expense drove our earnings growth.”
YEAR-TO-DATE RESULTS
For the year-to-date, sales increased 15% to $1.6 billion from approximately $1.4 billion a year ago. Changes in exchange rates accounted for 9% of the increase while product sales contributed 6%.
Operating income increased to $179.1 million, up 11% from $161.6 million a year ago. Diluted earnings per share increased 16% to $1.72 per share compared to $1.48 per share a year ago (which included the $.03 per share positive tax benefit recorded in the third quarter 2007).
OUTLOOK
Pfeiffer commented, “Global economic uncertainties are clouding the visibility we have on the fourth quarter. Retailers are reporting that consumers are reining in spending in light of these uncertainties and, as a result, some of our customers in the Beauty & Home and Closures segments are becoming more cautious and delaying orders so that they can reduce their inventory levels. It is difficult for us to predict how long this situation will last and how it will affect our near-term results. However, what is clear is that we have managed harsh global economic conditions in the past with the same strategy, the same determination, and the same diverse portfolio of businesses that we have right now. Our broad geographic presence enables us to benefit from growth in emerging areas while providing an insulating balance against softness in any one particular region. We remain committed to being the innovative leader in our field and, with our strong balance sheet, we are well positioned to continue to invest in research and development and take advantage of acquisition opportunities in spite of any tightness in the credit market. Nevertheless, we expect the fourth quarter to be challenging and we are looking at ways to reduce our cost structure, where possible, to offset any underutilized capacity. At this time we anticipate that diluted earnings per share for the fourth quarter will be in the range of $.42 to $.47 per share, compared to diluted earnings per share from continuing operations of $.47 per share reported a year ago.”
CASH DIVIDEND AND SHARE REPURCHASE PROGRAM
The Board of Directors declared a quarterly dividend of $.15 per share, payable November 19, 2008 to shareholders of record as of October 29, 2008. Also during the quarter, the Company repurchased approximately 535,000 shares of common stock for $20.7 million leaving approximately 4.5 million shares authorized for repurchase at the end of the third quarter.
OPEN CONFERENCE CALL
There will be a conference call on Thursday October 16, 2008 at 7:00 a.m. CDT to discuss the Company’s third quarter results for 2008. 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.aptargroup.com. Replay of the conference call can also be accessed on the Investor Relations page of the web site.
AptarGroup, Inc. is a leading global supplier of a broad range of innovative dispensing systems for the fragrance/cosmetic, personal care, pharmaceutical, household and food/beverage markets. AptarGroup is headquartered in Crystal Lake, Illinois, with manufacturing facilities in North America, Europe, Asia, and South America. For more information, visit the AptarGroup web site at www.aptargroup.com.
This press release contains 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; 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 policy; 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 | | Nine Months Ended |
| September 30, | | September 30, |
| 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | | |
| Net Sales | $ 532,180 | | | $ 485,692 | | | $ 1,615,757 | | | $ 1,408,409 | |
| Cost of Sales (exclusive of depreciation | | | | | | | |
| shown below) | 366,637 | | | 330,438 | | | 1,102,325 | | | 949,293 | |
| Selling, Research & Development and | | | | | | | |
| Administrative | 73,843 | | | 65,773 | | | 234,486 | | | 205,303 | |
| Depreciation and Other Amortization | 32,537 | | | 32,065 | | | 99,864 | | | 92,246 | |
| Operating Income (1) | 59,163 | | | 57,416 | | | 179,082 | | | 161,567 | |
| Other Income/(Expense): | | | | | | | |
| Interest Expense | (5,261 | ) | | (4,880 | ) | | (14,204 | ) | | (14,335 | ) |
| Interest Income | 3,475 | | | 2,222 | | | 10,334 | | | 5,600 | |
| Equity in Results of Affiliates | 194 | | | 158 | | | 417 | | | 426 | |
| Minority Interests | (43 | ) | | (22 | ) | | (24 | ) | | (4 | ) |
| Miscellaneous, net | (635 | ) | | (303 | ) | | (1,320 | ) | | (1,513 | ) |
| Income before Income Taxes | 56,893 | | | 54,591 | | | 174,285 | | | 151,741 | |
| Provision for Income Taxes | 17,242 | | | 15,196 | | | 52,460 | | | 45,798 | |
| Net Income | $ 39,651 | | | $ 39,395 | | | $ 121,825 | | | $ 105,943 | |
| | | | | | | |
| Net Income per Share - Basic | $ 0.59 | | | $ 0.58 | | | $ 1.79 | | | $ 1.54 | |
| Net Income per Share - Diluted | $ 0.57 | | | $ 0.56 | | | $ 1.72 | | | $ 1.48 | |
| | | | | | | |
| Average Number of Shares – Basic | 67,670 | | | 68,488 | | | 67,958 | | | 68,902 | |
| Average Number of Shares - Diluted | 69,937 | | | 70,909 | | | 70,812 | | | 71,717 | |
| | | | | | | |
| (1) Included in total Operating Income are expenses related to stock options of approximately $1.3 million and $9.9 million in the third quarter and first nine months, respectively, of 2008, and $1.6 million and $12.4 million in the third quarter and first nine months, respectively, of 2007. |
| APTARGROUP, INC. |
| Condensed Consolidated Financial Statements (Unaudited) |
| (continued) |
| (In Thousands) |
| CONSOLIDATED BALANCE SHEETS |
| | | |
| September 30, 2008 | | December 31, 2007 |
| ASSETS | | | |
| | | |
| Cash and Equivalents | $ 301,180 | | $ 313,739 |
| Receivables, net | 383,234 | | 360,736 |
| Inventories | 260,845 | | 272,556 |
| Other Current Assets | 65,026 | | 56,414 |
| Total Current Assets | 1,010,285 | | 1,003,445 |
| Net Property, Plant and Equipment | 703,190 | | 656,508 |
| Goodwill, net | 225,618 | | 222,668 |
| Other Assets | 27,099 | | 29,329 |
| Total Assets | $ 1,966,192 | | $ 1,911,950 |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | |
| | | |
| Short-Term Obligations | $ 175,853 | | $ 216,159 |
| Accounts Payable and Accrued Liabilities | 347,077 | | 349,030 |
| Total Current Liabilities | 522,930 | | 565,189 |
| Long-Term Obligations | 224,221 | | 146,711 |
| Deferred Liabilities | 78,738 | | 81,032 |
| Total Liabilities | 825,889 | | 792,932 |
| Stockholders' Equity | 1,140,303 | | 1,119,018 |
| Total Liabilities and Stockholders' Equity | $ 1,966,192 | | $ 1,911,950 |
| APTARGROUP, INC. |
| Condensed Consolidated Financial Statements (Unaudited) |
| (continued) |
| (In Thousands) |
| SEGMENT INFORMATION |
| | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | | | | | |
| 2008 | | 2007 | | 2008 | | 2007 |
| NET SALES | | | | | | | |
| | | | | | | |
| Beauty & Home | $ 271,654 | | | $ 258,613 | | | $ 844,328 | | | $ 750,757 | |
| Closures | 142,424 | | | 126,519 | | | 420,945 | | | 368,032 | |
| Pharma | 118,102 | | | 100,559 | | | 350,479 | | | 289,617 | |
| Other | - | | | 1 | | | 5 | | | 3 | |
| Total Net Sales | $ 532,180 | | | $ 485,692 | | | $ 1,615,757 | | | $ 1,408,409 | |
| | | | | | | |
| SEGMENT INCOME (1) | | | | | | | |
| | | | | | | |
| Beauty & Home | $ 21,701 | | | $ 25,561 | | | $ 77,904 | | | $ 78,136 | |
| Closures | 12,616 | | | 12,494 | | | 36,669 | | | 39,838 | |
| Pharma | 34,408 | | | 29,407 | | | 99,275 | | | 78,445 | |
| Corporate Expenses and Other | (10,046 | ) | | (10,213 | ) | | (35,693 | ) | | (35,943 | ) |
| Total Income Before Interest and Taxes | $ 58,679 | | | $ 57,249 | | | $ 178,155 | | | $ 160,476 | |
| Less: Interest Expense, Net | 1,786 | | | 2,658 | | | 3,870 | | | 8,735 | |
| Income before Income Taxes | $ 56,893 | | | $ 54,591 | | | $ 174,285 | | | $ 151,741 | |
| | | | | | | |
| SEGMENT INCOME % | | | | | | | |
| Beauty & Home | 8.0 | % | | 9.9 | % | | 9.2 | % | | 10.4 | % |
| Closures | 8.9 | % | | 9.9 | % | | 8.7 | % | | 10.8 | % |
| Pharma | 29.1 | % | | 29.2 | % | | 28.3 | % | | 27.1 | % |
| | | | | | | |
| Income before Interest and Taxes | 11.0 | % | | 11.8 | % | | 11.0 | % | | 11.4 | % |
| | | | | | | |
| Notes to Condensed Consolidated Financial Statements: |
| (1) - The Company evaluates performance of its business units and allocates resources based upon income before interest expense net of interest income, stock option and corporate expenses, income taxes and unusual items. |
CONTACT:
AptarGroup, Inc.
Stephen J. Hagge
815-477-0424
