Exhibit 99.1
AptarGroup Reports Record Revenue and Strong Earnings
CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--October 30, 2013--AptarGroup, Inc. (NYSE:ATR) today reported record third quarter revenue and strong quarterly earnings per share.
Third Quarter 2013 Summary
- Reported sales increased 6% from the prior year to a third quarter record of $624 million (core sales excluding currency effects increased 4%)
- Sales growth was driven by increased sales of the Pharma and Beauty + Home segments
- Food + Beverage sales were impacted by weak demand from the beverage market and decreased custom tooling sales
- Earnings were negatively impacted by continued soft demand in various U.S. markets, increased resin costs, and foreign currency transaction effects primarily in Latin America
- In spite of the challenging conditions, reported earnings per share rose 8% to $0.67 from $0.62 in the prior year
- Earnings per share excluding charges related to the European restructuring plan reached $0.70
THIRD QUARTER RESULTS
For the quarter ended September 30, 2013, reported sales increased 6% to $624 million from $590 million a year ago. Changes in currency exchange rates accounted for 2% of the sales growth in the quarter.
| Third Quarter Segment Sales Analysis (Change Over Prior Year) | ||||||||
Beauty + | Pharma | Food + | Total | |||||
| Product Sales (including tooling) | 4% | 7% | -1% | 4% | ||||
| Currency Effects | 1% | 3% | 1% | 2% | ||||
| Total Reported Growth | 5% | 10% | 0% | 6% | ||||
Commenting on the quarter, Stephen Hagge, President and CEO, said, “We are pleased to report record third quarter sales in spite of some challenges in the markets we are serving. Our Pharma segment had a good quarter driven primarily by increased demand from the consumer health care and injection markets. Our Beauty + Home segment’s sales also grew, even with decreased demand in the U.S. Weaker volumes in the beverage market and a decrease in custom tooling sales were offset by increased demand from the food market in our Food + Beverage segment.”
Hagge continued, “We were able to generate healthy earnings, even though we faced challenges including the ongoing weak volumes in the U.S., increases in the cost of plastic resin, and negative Latin American currency transaction effects.”
In the quarter, AptarGroup recognized charges related to its European restructuring plan and this had a negative effect on earnings per share of approximately $0.03. AptarGroup’s previous earnings per share guidance for the third quarter did not include any impact from this plan. Third quarter earnings per share, excluding the charges related to this plan, were $0.70. Prior year comparable earnings per share were $0.66 when the negative impact from non-recurring purchase accounting effects relating to the Stelmi acquisition were excluded (approximately $0.04 per share).
YEAR-TO-DATE RESULTS
For the nine months ended September 30, 2013, reported sales increased 7% to $1.88 billion from $1.76 billion a year ago. Aptar Stelmi contributed approximately $74 million or 4% to the year-to-date sales growth while changes in currency exchange rates added an additional 1%.
| Nine Months Year-to-Date Segment Sales Analysis (Change Over Prior Year) | ||||||||
Beauty + | Pharma | Food + | Total | |||||
| Product Sales (including tooling) | 1% | 3% | 7% | 2% | ||||
| Currency Effects | 2% | 1% | 1% | |||||
| Acquisitions | 17% | 4% | ||||||
| Total Reported Growth | 1% | 22% | 8% | 7% | ||||
Hagge commented on the year-to-date results, “The diversity of Aptar’s business continues to be a long-term stabilizing factor. Even with challenges coming from different areas of our business, each segment grew core sales over the prior year. We continue to focus on the markets we serve and consumer application fields that will lead to growth opportunities.”
AptarGroup reported earnings per share of $1.98 compared to $1.86 a year ago. Charges related to the Company’s European restructuring plan had a negative effect on earnings per share in 2013 of approximately $0.12. Year-to-date 2013 earnings per share, excluding the charges related to the restructuring plan, were $2.10. Prior year comparable earnings per share were $1.95 when the negative impact from costs and non-recurring purchase accounting effects relating to the Stelmi acquisition were excluded (approximately $0.09 per share).
EUROPEAN RESTRUCTURING PLAN UPDATE
In the third quarter, AptarGroup recognized approximately $2.7 million of expense related to the plan, of which $0.5 million were non-cash expenses. For the year-to-date, AptarGroup recognized approximately $10.3 million of expense related to the plan, of which $1.5 million were non-cash expenses. Using current exchange rates, AptarGroup expects to recognize approximately $3 million in additional costs in the fourth quarter of 2013. Savings from the plan are expected to be approximately $12 million on an annualized basis.
OUTLOOK
Commenting on AptarGroup’s outlook, Hagge said, “As we look toward the fourth quarter, we expect core sales of each segment to grow over the prior year; however, our earnings will be negatively impacted by the continuing soft conditions in the U.S. markets served by our Beauty + Home segment. There is also some pending French tax regulation that, if enacted before the end of the year, could result in a full-year retroactive tax adjustment that could negatively impact our fourth quarter results by as much as $0.09 per share. Our current guidance does not reflect this pending tax regulation and is based on an effective tax rate of approximately 30% which is comparable to last year’s fourth quarter effective rate.”
AptarGroup expects earnings per share for the fourth quarter, before costs associated with the European restructuring plan, to be in the range of $0.62 to $0.67 per share compared to $0.57 per share reported in the prior year before costs associated with the restructuring plan.
OPEN CONFERENCE CALL
There will be a conference call on Thursday, October 31, 2013 at 8:00 a.m. Central Time to discuss AptarGroup’s third quarter results for 2013. 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 systems for the beauty, personal care, home care, pharmaceutical, 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. 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 including the recent slowdown in Europe; 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; the timing and successful completion of our European restructuring plan; changes in capital availability or cost, including interest rate fluctuations; the competitive marketplace; fiscal and monetary policy including pending tax regulation; 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, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net Sales | $ | 623,644 | $ | 589,598 | $ | 1,882,718 | $ | 1,759,599 | ||||||||
Cost of Sales (exclusive of depreciation shown below) | 424,011 | 407,368 | 1,273,848 | 1,198,663 | ||||||||||||
Selling, Research & Development and Administrative | 86,917 | 80,094 | 269,335 | 256,433 | ||||||||||||
| Depreciation and Amortization (1) | 37,222 | 35,248 | 112,007 | 100,399 | ||||||||||||
| Restructuring Initiatives | 2,180 | - | 8,758 | (215 | ) | |||||||||||
| Operating Income | 73,314 | 66,888 | 218,770 | 204,319 | ||||||||||||
| Other Income/(Expense): | ||||||||||||||||
| Interest Expense | (4,841 | ) | (4,721 | ) | (15,364 | ) | (13,867 | ) | ||||||||
| Interest Income | 576 | 335 | 2,271 | 2,157 | ||||||||||||
| Equity in results of affiliates | (286 | ) | (229 | ) | (609 | ) | (518 | ) | ||||||||
| Miscellaneous, net | (437 | ) | 753 | (1,070 | ) | (247 | ) | |||||||||
| Income before Income Taxes | 68,326 | 63,026 | 203,998 | 191,844 | ||||||||||||
| Provision for Income Taxes | 23,094 | 20,925 | 68,908 | 64,278 | ||||||||||||
| Net Income | $ | 45,232 | $ | 42,101 | $ | 135,090 | $ | 127,566 | ||||||||
| Net Loss Attributable to Noncontrolling Interests | 32 | 26 | 5 | 56 | ||||||||||||
| Net Income Attributable to AptarGroup, Inc. | $ | 45,264 | $ | 42,127 | $ | 135,095 | $ | 127,622 | ||||||||
| Net Income Attributable to AptarGroup, Inc. Per Common Share: | ||||||||||||||||
| Basic | $ | 0.68 | $ | 0.63 | $ | 2.04 | $ | 1.92 | ||||||||
| Diluted | $ | 0.67 | $ | 0.62 | $ | 1.98 | $ | 1.86 | ||||||||
| Average Numbers of Shares Outstanding: | ||||||||||||||||
| Basic | 66,092 | 66,541 | 66,222 | 66,439 | ||||||||||||
| Diluted | 67,986 | 68,353 | 68,273 | 68,711 | ||||||||||||
| (1) Depreciation and Amortization for the quarter and year-to-date ended September 30, 2013 included approximately $0.5 million and $1.5 million, respectively, of accelerated depreciation related to the European restructuring plan. | ||||||||||||||||
| APTARGROUP, INC. | ||||||
| Condensed Consolidated Financial Statements (Unaudited) | ||||||
| (continued) | ||||||
| (In Thousands) | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| September 30, 2013 | December 31, 2012 | |||||
| ASSETS | ||||||
| Cash and Equivalents | $ | 247,851 | $ | 229,755 | ||
| Receivables, net | 439,016 | 396,788 | ||||
| Inventories | 349,690 | 321,885 | ||||
| Other Current Assets | 109,091 | 90,505 | ||||
| Total Current Assets | 1,145,648 | 1,038,933 | ||||
| Net Property, Plant and Equipment | 857,833 | 848,233 | ||||
| Goodwill, net | 355,316 | 351,552 | ||||
| Other Assets | 69,575 | 85,694 | ||||
| Total Assets | $ | 2,428,372 | $ | 2,324,412 | ||
| LIABILITIES AND EQUITY | ||||||
| Short-Term Obligations | $ | 77,710 | $ | 74,654 | ||
| Accounts Payable and Accrued Liabilities | 402,632 | 380,669 | ||||
| Total Current Liabilities | 480,342 | 455,323 | ||||
| Long-Term Obligations | 355,185 | 352,860 | ||||
| Deferred Liabilities | 132,002 | 135,731 | ||||
| Total Liabilities | 967,529 | 943,914 | ||||
| AptarGroup, Inc. Stockholders' Equity | 1,460,233 | 1,379,890 | ||||
| Noncontrolling Interests in Subsidiaries | 610 | 608 | ||||
| Total Equity | 1,460,843 | 1,380,498 | ||||
| Total Liabilities and Equity | $ | 2,428,372 | $ | 2,324,412 | ||
| APTARGROUP, INC. | ||||||||||||||||
| Condensed Consolidated Financial Statements (Unaudited) | ||||||||||||||||
| (continued) | ||||||||||||||||
| (In Thousands) | ||||||||||||||||
| SEGMENT INFORMATION | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
NET SALES | ||||||||||||||||
| Beauty + Home | $ | 376,051 | $ | 358,476 | $ | 1,114,507 | $ | 1,104,911 | ||||||||
| Pharma | 172,270 | 156,100 | 524,070 | 429,122 | ||||||||||||
| Food + Beverage | 75,323 | 75,022 | 244,141 | 225,566 | ||||||||||||
| Total Net Sales | $ | 623,644 | $ | 589,598 | $ | 1,882,718 | $ | 1,759,599 | ||||||||
SEGMENT INCOME (1) | ||||||||||||||||
| Beauty + Home | $ | 30,943 | $ | 30,050 | $ | 85,697 | $ | 96,569 | ||||||||
| Pharma (2) | 44,737 | 34,194 | 141,154 | 104,676 | ||||||||||||
| Food + Beverage | 7,688 | 9,611 | 28,102 | 24,142 | ||||||||||||
| Restructuring Initiatives & Related Depreciation (3) | (2,664 | ) | - | (10,257 | ) | 215 | ||||||||||
| Corporate and Other | (8,113 | ) | (6,443 | ) | (27,605 | ) | (22,048 | ) | ||||||||
| Total Income Before Interest and Taxes | $ | 72,591 | $ | 67,412 | $ | 217,091 | $ | 203,554 | ||||||||
| Interest Expense, Net | (4,265 | ) | (4,386 | ) | (13,093 | ) | (11,710 | ) | ||||||||
| Income before Income Taxes | $ | 68,326 | $ | 63,026 | $ | 203,998 | $ | 191,844 | ||||||||
SEGMENT INCOME AS % OF NET SALES | ||||||||||||||||
| Beauty + Home | 8.2 | % | 8.4 | % | 7.7 | % | 8.7 | % | ||||||||
| Pharma (2) | 26.0 | % | 21.9 | % | 26.9 | % | 24.4 | % | ||||||||
| Food + Beverage | 10.2 | % | 12.8 | % | 11.5 | % | 10.7 | % | ||||||||
| 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. | ||||||||||||||||
(2) - For comparison to the current year third quarter, Pharma segment income as a percent of net sales for 2012 was 24.4% when non-recurring purchase accounting effects were excluded. For comparable year-to-date amounts, Pharma segment income as a percent of net sales for 2013 was approximately 28.2% when the effects of the Stelmi acquisition for the first six months of 2013 were excluded, and approximately 26.7% for year-to-date 2012 when costs and non-recurring purchase accounting effects of the Stelmi acquisition were excluded. | ||||||||||||||||
| (3) - Restructuring Initiatives & Related Depreciation includes the following income/(expense) items: | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
Depreciation: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| European Restructuring Plan | $ | (484 | ) | $ | (1,499 | ) | ||||||||||
Restructuring Initiatives: | ||||||||||||||||
| European Restructuring Plan | (2,180 | ) | (8,802 | ) | ||||||||||||
| Other Initiatives | $ | - | $ | 44 | 215 | |||||||||||
| Total Restructuring Initiatives & Related Depreciation | $ | (2,664 | ) | $ | - | $ | (10,257 | ) | $ | 215 | ||||||
CONTACT:
AptarGroup, Inc.
Matthew DellaMaria, 815-477-0424