Exhibit 99.1
| For More Information Contact: | FOR IMMEDIATE RELEASE | |
| Stephen J. Hagge | ||
| AptarGroup, Inc. | ||
| 815-477-0424 |
APTARGROUP REPORTS RECORD SECOND QUARTER RESULTS;
INCREASES DIVIDEND
Crystal Lake, Illinois, July 17, 2003—AptarGroup, Inc. (NYSE:ATR) today reported record second quarter results. The Company also announced an increase in its dividend rate.
SECOND QUARTER RESULTS
For the quarter ended June 30, 2003, sales increased 24 percent to a record $288.1 million from $233.2 million in the prior year. Sales excluding changes in foreign currency exchange rates increased approximately 11 percent from the prior year. Net income for the second quarter of 2003 increased to a record $21.3 million from $17.5 million a year ago. Diluted earnings per share were $.58 per share compared to $.48 per share in the prior year.
In the second quarter of the prior year, the Company recorded after-tax charges of $.8 million relating to its Strategic Initiative.
SIX MONTHS RESULTS
For the six months ended June 30, 2003, sales increased 22 percent to $553.2 million from $451.9 million in the prior year. Sales excluding changes in foreign currency exchange rates increased approximately 10 percent from the prior year. Net income for the first six months of 2003 increased to $40.6 million from $30.8 million a year ago. Diluted earnings per share were $1.11 per share compared to $.84 per share in the prior year.
In the first six months of 2002, the Company recorded after-tax charges of $2.7 million related to a patent dispute settlement and $.9 million for the Strategic Initiative.
MANAGEMENT COMMENT
Commenting on the quarter, Carl A. Siebel, President and Chief Executive Officer, said, “We are very pleased to report another quarter of record results. While we continue to face price competition in all of our markets, pricing pressure is mitigated by our ability to offer innovative new products and further penetrate the markets we serve. The weak U.S. dollar relative to the same period a year ago contributed to the increase in sales. Foreign currency translation effects aside, sales were
particularly strong to the food/beverage, personal care and fragrance/cosmetic markets while sales to the pharmaceutical market were slightly above the prior year.”
Siebel added, “Our operating income for the second quarter increased over the prior year. However, operating income continues to be adversely impacted by effect of the weaker dollar on cross-currency transactions such as when we produce with Euro-based costs and sell in U.S. dollars. The negative effect from our cross-currency transactions offset the favorable translation of foreign denominated results and adversely affected operating income as a percentage of sales. The combination of higher operating income and lower net interest expense drove diluted earnings per share to an all-time quarterly high.”
BUSINESS SEGMENT PERFORMANCE
For the quarter, sales of the Dispensing Systems segment increased 26 percent, to $243.2 million from $192.9 million in the prior year. The increase is mainly due to increased sales to the personal care, fragrance/cosmetic and food markets and changes in exchange rates. For the first six months, sales increased 24 percent to $462.3 million from $373.0 million in the prior year. Second quarter EBIT (earnings before interest and taxes) for the Dispensing Systems segment increased to $33.9 million from $30.3 million in the prior year. For the first six months, EBIT for the segment increased to $63.8 million from $56.4 million in the prior year.
For the quarter, sales of the SeaquistPerfect segment increased 9 percent, to $46.8 million from $43.0 million in the prior year. The increase is primarily due to the weaker U.S. dollar. Increased sales to the personal care market offset a decline in sales to the household market. For the first six months, sales increased 12 percent to $94.7 million from $84.6 million in the prior year. Second quarter EBIT for the SeaquistPerfect segment increased to $4.2 million from $3.0 million a year ago due to the mix of products sold and continued cost savings. For the first six months, EBIT increased to $8.8 million from $6.2 million in the prior year.
OUTLOOK
Siebel commented, “Looking forward, the horizon of sales visibility continues to be short. Currently, we expect the increase in sales excluding translation effects in the third quarter of 2003 to be in the area of 5 to 10 percent over the prior year’s level. A modest reduction in the incoming order rate we are seeing from fragrance/cosmetic customers is expected to be more than offset by sales increases to the other markets.”
Siebel concluded, “Presently, we anticipate diluted earnings per share for the third quarter of 2003 to be in the range of $.50 to $.55 compared to $.49 per share in the prior year.”
INCREASED CASH DIVIDEND
The Board of Directors declared an increased quarterly dividend of $.07 per share, payable August 19, 2003 to shareholders of record as of July 29, 2003. The new dividend rate represents a 17 percent increase over the prior dividend rate.
OPEN CONFERENCE CALL
There will be a conference call on Friday, July 18, 2003 at 8:00 a.m. CST to discuss the Company’s second quarter results for 2003. The call will last approximately one hour and feature remarks by Carl A. Siebel and Stephen J. Hagge, AptarGroup’s Chief Financial Officer. Interested parties are invited to listen to a live webcast by visiting the Investor Relations page atwww.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 athttp://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, the Company’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, those related to overall business conditions in the various markets in which the Company operates, fiscal and monetary policy, changes in foreign exchange rates, direct or indirect consequences of acts of war or terrorism and other risks and uncertainties discussed from time to time in the Company’s filings with the Securities and Exchange Commission, including its Form 10-K’s and 10-Q’s. Readers are cautioned not to place undue reliance on forward-looking statements.
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APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(In Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
Net Sales | $ | 288,087 | $ | 233,154 | $ | 553,236 | $ | 451,861 | ||||||||
Cost of Sales (exclusive of depreciation shown below) | 188,285 | 148,504 | 360,873 | 288,265 | ||||||||||||
Selling, Research & Development and Administrative | 44,849 | 37,995 | 86,298 | 73,055 | ||||||||||||
Depreciation and Other Amortization | 21,540 | 16,737 | 42,312 | 34,154 | ||||||||||||
Strategic Initiative Costs: | ||||||||||||||||
Severance and Other | — | 946 | — | 975 | ||||||||||||
Patent Dispute Settlement | — | — | — | 4,168 | ||||||||||||
Operating Income | 33,413 | 28,972 | 63,753 | 51,244 | ||||||||||||
Other Income/(Expense): | ||||||||||||||||
Interest Expense | (2,427 | ) | (2,776 | ) | (4,836 | ) | (5,577 | ) | ||||||||
Interest Income | 689 | 358 | 1,312 | 688 | ||||||||||||
Equity in Results of Affiliates | 156 | (75 | ) | 338 | (186 | ) | ||||||||||
Minority Interests | (98 | ) | 48 | (117 | ) | 18 | ||||||||||
Miscellaneous, net | 226 | (425 | ) | 390 | (362 | ) | ||||||||||
Income before Income Taxes | 31,959 | 26,102 | 60,840 | 45,825 | ||||||||||||
Provision for Income Taxes | 10,610 | 8,563 | 20,285 | 15,011 | ||||||||||||
Net Income | $ | 21,349 | $ | 17,539 | $ | 40,555 | $ | 30,814 | ||||||||
Net Income per Share—Basic | $ | 0.59 | $ | 0.49 | $ | 1.13 | $ | 0.86 | ||||||||
Net Income per Share—Diluted | $ | 0.58 | $ | 0.48 | $ | 1.11 | $ | 0.84 | ||||||||
Average Number of Shares – Basic | 36,031 | 35,940 | 35,984 | 35,902 | ||||||||||||
Average Number of Shares—Diluted | 36,856 | 36,893 | 36,666 | 36,777 | ||||||||||||
Note to Condensed Consolidated Financial Statements:
For the three months ended June 30, 2002, net charges related to the Company’s Strategic Initiative included $288 recorded in Cost of Sales, $70 recorded in Depreciation and Other Amortization, $946 of Severance and Other, less a tax benefit of $489. For the six months ended June 30, 2002, net charges related to the Company’s Strategic Initiative included $288 recorded in Cost of Sales, $140 recorded in Depreciation and Other Amortization, $975 of Severance and Other, less a tax benefit of $527.
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
CONSOLIDATED BALANCE SHEETS
| June 30, 2003 | December 31, 2002 | |||||
ASSETS | ||||||
Cash and Equivalents | $ | 121,190 | $ | 90,205 | ||
Receivables, net | 240,857 | 197,881 | ||||
Inventories | 151,257 | 127,828 | ||||
Other Current Assets | 36,679 | 31,282 | ||||
Total Current Assets | 549,983 | 447,196 | ||||
Net Property, Plant and Equipment | 456,822 | 434,817 | ||||
Goodwill, net | 132,685 | 128,930 | ||||
Other Assets | 38,537 | 36,728 | ||||
Total Assets | $ | 1,178,027 | $ | 1,047,671 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Short-Term Obligations | $ | 98,468 | $ | 7,722 | ||
Accounts Payable and Accrued Liabilities | 185,566 | 154,966 | ||||
Total Current Liabilities | 284,034 | 162,688 | ||||
Long-Term Obligations | 133,944 | 219,182 | ||||
Deferred Liabilities | 74,483 | 71,334 | ||||
Total Liabilities | 492,461 | 453,204 | ||||
Stockholders’ Equity | 685,566 | 594,467 | ||||
Total Liabilities and Stockholders’ Equity | $ | 1,178,027 | $ | 1,047,671 | ||
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
SEGMENT INFORMATION
| THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
NET SALES | ||||||||||||||||
Dispensing Systems | $ | 243,164 | $ | 192,941 | $ | 462,332 | $ | 372,968 | ||||||||
SeaquistPerfect | 46,785 | 43,006 | 94,651 | 84,620 | ||||||||||||
Intersegment Eliminations | (1,862 | ) | (2,793 | ) | (3,747 | ) | (5,727 | ) | ||||||||
Total Net Sales | $ | 288,087 | $ | 233,154 | $ | 553,236 | $ | 451,861 | ||||||||
EARNINGS (1) | ||||||||||||||||
Dispensing Systems | $ | 33,894 | $ | 30,262 | $ | 63,793 | $ | 56,370 | ||||||||
SeaquistPerfect | 4,231 | 3,038 | 8,799 | 6,205 | ||||||||||||
Corporate Expenses and Other | (4,428 | ) | (3,476 | ) | (8,228 | ) | (6,290 | ) | ||||||||
Strategic Initiative Charges (2) | — | (1,304 | ) | — | (1,403 | ) | ||||||||||
Patent Dispute Settlement (2) | — | — | — | (4,168 | ) | |||||||||||
Earnings before Interest and Taxes(EBIT) | 33,697 | 28,520 | 64,364 | 50,714 | ||||||||||||
Less: Interest Expense, Net | 1,738 | 2,418 | 3,524 | 4,889 | ||||||||||||
Income before Income Taxes | $ | 31,959 | $ | 26,102 | $ | 60,840 | $ | 45,825 | ||||||||
Notes to Condensed Consolidated Financial Statements:
(1) – The Company evaluates performance of its business units and allocates resources based upon earnings before interest expense in excess of interest income, corporate expenses and income taxes (collectively referred to as “EBIT”) excluding unusual items.
(2) – Strategic Initiative Charges and the Patent Dispute Settlement relate to the Dispensing Systems segment.
