Exhibit 99.1
AptarGroup Reports Fourth Quarter Results;
Achieves Record Annual Revenue and Earnings Per Share
CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--February 5, 2009--AptarGroup, Inc. (NYSE:ATR) today reported fourth quarter and annual results.
Fourth Quarter 2008 Summary
- Sales rose 2% excluding currency effects
- Changes in exchange rates reduced reported sales by 8%
- Pharma segment strength offset weakness in Beauty & Home and Closures segments
- Earnings per share from continuing operations were $.46 compared to $.47 a year ago
- Balance sheet remained in strong condition
FOURTH QUARTER RESULTS
For the quarter ended December 31, 2008, reported sales decreased 6% to $455.9 million from $483.8 million in the fourth quarter of 2007 due to the negative effects of a stronger dollar relative to other currencies. When currency effects are excluded, sales increased 2% over the prior year.
Commenting on the quarter, Peter Pfeiffer, President and Chief Executive Officer, said, “Clearly, these are challenging times and our sales growth in certain markets was hampered by the global economic crisis. Also, the dollar gained ground on other currencies compared to a year ago and this had a negative effect on our translated results. Demand for our Beauty & Home dispensing systems from the personal care market was stable but we experienced declining volumes in the fragrance/cosmetic and household markets. Increased sales by our Closures segment to the food/beverage and personal care markets were offset by a decline in sales to the household market. Finally, our Pharma segment continued to deliver another strong performance as demand for our industry-leading metered dose inhaler valves and nasal spray pumps increased.”
| Fourth Quarter Segment Sales Analysis (Growth Over Prior Year) | ||||||||
Beauty & | Closures | Pharma | Total | |||||
| Product and Custom Tooling Sales | -3% | 2% | 9% | 1% | ||||
| Acquisitions | 1% | 1% | 1% | 1% | ||||
| Currency Effects | -8% | -6% | -7% | -8% | ||||
| Total Growth | -10% | -3% | 3% | -6% | ||||
Pfeiffer added, “Declining sales in our Beauty & Home and Closures segments led to underutilized capacity. While we took actions to reduce costs, we could not completely offset the negative volume effects. Beauty & Home segment income decreased 36% to $13.6 million and Closures segment income decreased 15% to $8.7 million. Pharma segment income of $27.8 million was only slightly above the prior year’s level primarily due to sales mix and the negative effects of currency exchange rates. Further, due to lower resin costs at the end of the year, our LIFO inventory reserve decreased and this had a positive impact on our corporate expenses. Overall, we were able to achieve operating income of $49.3 million which was a slight increase over the prior year. Diluted earnings per share from continuing operations were $.46 per share compared to $.47 per share in the prior year. Discontinued operations in last year’s fourth quarter accounted for $.03 per share related to a gain on the sale of our Australian operations.”
ANNUAL RESULTS
Commenting on AptarGroup’s full year performance, Pfeiffer said, “The year 2008 was a year of two very different halves. We began the year coming off of 2007’s record performance which was the strongest in the history of our company and 2008’s first half results continued to be excellent. However, in the third quarter, with the onset of the financial crisis, we began to see slowdowns in certain markets. In spite of the weakness in the second half, we achieved our 43rd consecutive year of sales growth. We reported record sales of nearly $2.1 billion, up 9% from $1.9 billion in 2007. Increased product sales accounted for 5% of our sales growth and changes in exchange rates added 4%. Also, the strength of our Pharma segment helped offset profit declines at our other two segments and consolidated operating income rose 8% to a record $228.4 million up from $210.7 million a year ago. This was in spite of rising input costs that occurred throughout most of the year.”
Diluted earnings per share from continuing operations rose 12% to a record level of $2.18 per share, up from $1.95 per share a year ago. AptarGroup spent $57.6 million to repurchase approximately 1.4 million shares of common stock in 2008, leaving approximately 4.5 million shares authorized for repurchase at the end of the year. Also during the year, AptarGroup paid $38.0 million in dividends to stockholders, or $.56 per share.
OUTLOOK
Pfeiffer commented, “Our visibility, which had already begun to diminish toward the end of 2008, remains very limited at this time. Preliminary first quarter indications point toward continuing softness in our Beauty & Home and Closures segments. Our customers in these segments are cautious in response to contracting consumer spending and they are reducing inventories and delaying certain product launches until the horizon becomes clearer. We are intensifying our review of our own operations and making adjustments where necessary. At the same time, we remain committed to being the innovative leader and we will maintain the flexibility needed to help our customers when their businesses bounce back. However, we anticipate that underutilized capacity will continue to have a negative effect on our results in the coming quarter. Our Pharma segment should perform at or above prior year levels, excluding the impact of changes in currency exchange rates. Exchange rates are expected to be quite different than what we experienced in the first quarter of 2008, when the average exchange rate between the U.S. dollar and the Euro was 1.50 and it is approximately 1.30 today, a 13% strengthening of the dollar.
We currently estimate that diluted earnings per share for the first quarter of 2009 will be in the range of $.35 to $.40 per share compared to $.52 per share in the prior year. Looking beyond the first quarter, we are confident that the diversity of our business model, along with our strong balance sheet and experienced management team, will enable us to emerge from this tenuous period and continue our long-term growth.”
OPEN CONFERENCE CALL
There will be a conference call on Friday February 6, 2009 at 8:00 a.m. CST to discuss the Company’s fourth quarter and annual 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; financial conditions of customers and suppliers; 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 | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||
| Net Sales | $ | 455,928 | $ | 483,758 | $ | 2,071,685 | $ | 1,892,167 | |||||||
| Cost of Sales (exclusive of depreciation | |||||||||||||||
| shown below) | 308,950 | 334,480 | 1,411,275 | 1,283,773 | |||||||||||
| Selling, Research & Development and | |||||||||||||||
| Administrative | 66,360 | 68,893 | 300,846 | 274,196 | |||||||||||
| Depreciation and Other Amortization | 31,281 | 31,220 | 131,145 | 123,466 | |||||||||||
| Operating Income (1) | 49,337 | 49,165 | 228,419 | 210,732 | |||||||||||
| Other Income/(Expense): | |||||||||||||||
| Interest Expense | (4,483 | ) | (5,157 | ) | (18,687 | ) | (19,492 | ) | |||||||
| Interest Income | 2,786 | 3,318 | 13,120 | 8,918 | |||||||||||
| Equity in Results of Affiliates | (107 | ) | 57 | 310 | 483 | ||||||||||
| Minority Interests | 18 | 37 | (6 | ) | 33 | ||||||||||
| Miscellaneous, net | (868 | ) | 834 | (2,188 | ) | (679 | ) | ||||||||
| Income from Continuing Operations | |||||||||||||||
| before Income Taxes | 46,683 | 48,254 | 220,968 | 199,995 | |||||||||||
| Provision for Income Taxes | 15,013 | 14,690 | 67,473 | 60,488 | |||||||||||
| Income from Continuing Operations | 31,670 | 33,564 | 153,495 | 139,507 | |||||||||||
| Income from Discontinued Operations, Net of Tax | - | 2,232 | - | 2,232 | |||||||||||
| Net Income | $ | 31,670 | $ | 35,796 | $ | 153,495 | $ | 141,739 | |||||||
| Net Income per Share - Basic | |||||||||||||||
| Continuing Operations | $ | 0.47 | $ | 0.49 | $ | 2.26 | $ | 2.03 | |||||||
| Discontinued Operations | - | 0.03 | - | 0.03 | |||||||||||
| $ | 0.47 | $ | 0.52 | $ | 2.26 | $ | 2.06 | ||||||||
| Net Income per Share - Diluted | |||||||||||||||
| Continuing Operations | $ | 0.46 | $ | 0.47 | $ | 2.18 | $ | 1.95 | |||||||
| Discontinued Operations | - | 0.03 | - | 0.03 | |||||||||||
| $ | 0.46 | $ | 0.50 | $ | 2.18 | $ | 1.98 | ||||||||
| Average Number of Shares – Basic | 67,535 | 68,376 | 67,851 | 68,769 | |||||||||||
| Average Number of Shares - Diluted | 69,225 | 70,983 | 70,518 | 71,523 | |||||||||||
(1) Included in total Operating Income are expenses related to stock options of approximately $1.1 million and $11.1 | |||||||||||||||
| APTARGROUP, INC. | ||||||
| Condensed Consolidated Financial Statements (Unaudited) | ||||||
| (continued) | ||||||
| (In Thousands) | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| December 31, 2008 | December 31, 2007 | |||||
| ASSETS | ||||||
| Cash and Equivalents | $ | 192,072 | $ | 313,739 | ||
| Receivables, net | 343,937 | 360,736 | ||||
| Inventories | 244,775 | 272,556 | ||||
| Other Current Assets | 78,965 | 56,414 | ||||
| Total Current Assets | 859,749 | 1,003,445 | ||||
| Net Property, Plant and Equipment | 720,882 | 656,508 | ||||
| Goodwill, net | 227,041 | 222,668 | ||||
| Other Assets | 24,258 | 29,329 | ||||
| Total Assets | $ | 1,831,930 | $ | 1,911,950 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Short-Term Obligations | $ | 64,619 | $ | 216,158 | ||
| Accounts Payable and Accrued Liabilities | 310,117 | 349,031 | ||||
| Total Current Liabilities | 374,736 | 565,189 | ||||
| Long-Term Obligations | 226,888 | 146,711 | ||||
| Deferred Liabilities | 99,456 | 81,032 | ||||
| Total Liabilities | 701,080 | 792,932 | ||||
| Stockholders' Equity | 1,130,850 | 1,119,018 | ||||
| Total Liabilities and Stockholders' Equity | $ | 1,831,930 | $ | 1,911,950 | ||
| APTARGROUP, INC. | |||||||||||||||||
| Condensed Consolidated Financial Statements (Unaudited) | |||||||||||||||||
| (continued) | |||||||||||||||||
| (In Thousands) | |||||||||||||||||
| SEGMENT INFORMATION | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||||
| NET SALES | |||||||||||||||||
| Beauty & Home | $ | 228,150 | $ | 254,461 | $ | 1,072,478 | $ | 1,005,218 | |||||||||
| Closures | 120,800 | 124,968 | 541,745 | 493,000 | |||||||||||||
| Pharma | 106,977 | 104,251 | 457,456 | 393,868 | |||||||||||||
| Other | 1 | 78 | 6 | 81 | |||||||||||||
| Total Net Sales | $ | 455,928 | $ | 483,758 | $ | 2,071,685 | $ | 1,892,167 | |||||||||
| SEGMENT INCOME (1) | |||||||||||||||||
| Beauty & Home | $ | 13,612 | $ | 21,417 | $ | 91,516 | $ | 99,553 | |||||||||
| Closures | 8,658 | 10,198 | 45,327 | 50,036 | |||||||||||||
| Pharma | 27,815 | 27,716 | 127,090 | 106,161 | |||||||||||||
| Corporate Expenses and Other | (1,705 | ) | (9,238 | ) | (37,398 | ) | (45,181 | ) | |||||||||
| Total Income from Continuing Operations before Interest and Taxes | $ | 48,380 | $ | 50,093 | $ | 226,535 | $ | 210,569 | |||||||||
| Less: Interest Expense, Net | 1,697 | 1,839 | 5,567 | 10,574 | |||||||||||||
| Income from Continuing Operations before Income Taxes | $ | 46,683 | $ | 48,254 | $ | 220,968 | $ | 199,995 | |||||||||
| SEGMENT INCOME % | |||||||||||||||||
| Beauty & Home | 6.0 | % | 8.4 | % | 8.5 | % | 9.9 | % | |||||||||
| Closures | 7.2 | % | 8.2 | % | 8.4 | % | 10.1 | % | |||||||||
| Pharma | 26.0 | % | 26.6 | % | 27.8 | % | 27.0 | % | |||||||||
| Income from Continuing Operations before Interest and Taxes | 10.6 | % | 10.4 | % | 10.9 | % | 11.1 | % | |||||||||
| Notes to Condensed Consolidated Financial Statements: | |||||||||||||||||
(1) - The Company evaluates performance of its business units and allocates resources based upon income before | |||||||||||||||||
CONTACT:
Stephen J. Hagge
AptarGroup, Inc.
815-477-0424