EXHIBIT 99.1
News
For Immediate Release SILGAN HOLDINGS INC.
4 Landmark Square
Suite 400
Stamford, CT 06901
Telephone: (203) 975-7110
Fax: (203) 975-7902
Contact:
Robert B. Lewis
(203) 406-3160
SILGAN HOLDINGS REPORTS THIRD QUARTER EARNINGS
AND CONFIRMS OUTLOOK FOR RECORD
FULL YEAR 2004 EARNINGS
STAMFORD, CT, October 21, 2004 -- Silgan Holdings Inc. (Nasdaq:SLGN), a leading
supplier of consumer goods packaging products, today reported third quarter 2004
net income of $38.4 million, or $2.06 per diluted share, as compared to third
quarter 2003 net income of $26.8 million, or $1.45 per diluted share. The
results in the third quarter of 2003 included the impact of plant
rationalization charges of $7.7 million, or $0.25 per diluted share.
"We are pleased with the performance of the business in the quarter," said Phil
Silver, Co-Chairman and Co-CEO. "We achieved very strong earnings gains through
increases in both revenue and operating income coupled with a significant
reduction of interest expense. This improvement was particularly satisfying as a
result of the positive contribution from the acquisitions we made last year, in
particular, the Silgan Closures business. We continue to benefit from lower
interest expense resulting from our debt refinancing at the end of last year as
well as lower borrowings due to our debt reduction initiative. As we hit the
home stretch for the year, we remain comfortable with our earnings guidance for
a record 2004."
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SILGAN HOLDINGS
October 21, 2004
Page 2
Net sales for the third quarter of 2004 were $784.8 million, an increase of
$23.8 million, or 3.1 percent, as compared to $761.0 million for the same period
in 2003. This increase was primarily due to higher average selling prices
resulting from the pass through of higher raw material costs in both the metal
food container and plastic container businesses.
Income from operations for the third quarter of 2004 was $77.1 million, an
increase of $10.7 million, or 16.1 percent, as compared to $66.4 million for the
third quarter of 2003. The year-over-year third quarter comparisons of income
from operations benefited due to the inclusion of rationalization charges of
$7.7 million in 2003 and better margins in the metal food container business
resulting from an improved product mix and strong operating results at Silgan
Closures. These benefits were partially offset by a less favorable mix of
products sold in the plastic container business.
Interest and other debt expense for the third quarter of 2004 was $13.6 million,
a decrease of $8.0 million as compared to the same period in 2003. This decrease
was primarily due to lower average outstanding borrowings as a result of debt
reductions late in 2003 and a lower average cost of borrowings. The Company's
average cost of borrowings was lower as a result of refinancing $500 million of
9% Senior Subordinated Debentures in late 2003 with 6 3/4% Senior Subordinated
Notes and borrowings under the senior secured credit facility and a twenty-five
basis point reduction in margin on B term loans under the senior secured credit
facility in July 2004.
Metal Food Containers
Net sales of the metal food container business were $642.7 million for the third
quarter of 2004, an increase of $21.0 million, or 3.4 percent, over the third
quarter of 2003, primarily as a result of higher average selling prices due to
the pass through of higher steel costs.
Income from operations of the metal food container business increased in the
third quarter of 2004 to $69.2 million as compared to $63.5 million for the same
period in 2003, and operating margin increased to 10.8 percent from 10.2 percent
over the same periods. These increases were principally due to the effect of an
improved mix of products sold, as well as the benefits from
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SILGAN HOLDINGS
October 21, 2004
Page 3
rationalization and integration activities at Silgan Closures, partially offset
by increases in manufacturing costs.
Plastic Containers
Net sales of the plastic container business were $142.1 million in the third
quarter of 2004, an increase of $2.8 million, or 2.0 percent, as compared to the
third quarter of 2003. This increase was principally a result of higher average
selling prices due to the pass through of increased resin costs, partially
offset by the effect of price concessions made last year and a less favorable
mix of products sold due primarily to weak demand from certain customers in the
personal care market.
Income from operations of the plastic container business for the third quarter
of 2004 was $9.8 million as compared to $4.3 million in the third quarter of
2003, and operating margin increased to 6.9 percent from 3.1 percent over the
same periods. Income from operations and operating margin in the third quarter
of 2003 included rationalization charges totaling $7.1 million related to
closing two manufacturing facilities. Income from operations and operating
margin in the third quarter of 2004 were negatively impacted by a less favorable
mix of products sold, prior year price concessions and higher manufacturing
costs.
Nine Months
Net income for the first nine months of 2004 was $67.7 million, or $3.64 per
diluted share, as compared to net income for the first nine months of 2003 of
$44.5 million, or $2.42 per diluted share. The Company recorded rationalization
charges totaling $1.2 million, or $0.04 per diluted share, for the first nine
months of 2004 as compared with $7.7 million, or $0.25 per diluted share, for
the same period in 2003.
Net sales for the first nine months of 2004 increased $93.9 million, or 5.3
percent, to $1.855 billion as compared to $1.761 billion for the first nine
months of 2003. This increase was largely the result of higher net sales in the
metal food container business primarily due to the acquisition of Silgan
Closures in early 2003 and the effect of the pass through of higher raw material
costs in both the metal food container and plastic container businesses.
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SILGAN HOLDINGS
October 21, 2004
Page 4
Income from operations for the first nine months of 2004 was $155.9 million, an
increase of $21.4 million, or 15.9 percent, from the same period in 2003, and
operating margin increased to 8.4 percent from 7.6 percent over the same
periods. The increase in income from operations and operating margin was
primarily a result of the integration and rationalization benefits from
businesses acquired in early 2003, increased sales of value-added products and
the incurrence of rationalization charges of $7.7 million in 2003, partially
offset by higher depreciation expense.
Interest expense for the first nine months of 2004 was $43.9 million, a decrease
of $16.5 million as compared to the first nine months of 2003. This decrease
resulted primarily from a lower average cost of borrowings due to the Company's
refinancing in late 2003 and from lower average outstanding borrowings as a
result of debt reductions in late 2003.
Dividend
On September 15, 2004, the Company paid a quarterly cash dividend in the amount
of $0.15 per share to holders of record of common stock of the Company on
September 1, 2004. This dividend payment aggregated $2.8 million.
Outlook for 2004
The Company expects fourth quarter 2004 net income per diluted share to be in
the range of $0.42 to $0.62. Accordingly, the Company is confirming its full
year 2004 earnings outlook and tightening its range of estimated net income per
diluted share for 2004 to $4.06 to $4.26. This estimate includes rationalization
charges of $0.04 per diluted share already recorded. In the fourth quarter of
2003, the Company recorded a net loss of $0.13 per diluted share, which included
a loss on early extinguishment of debt and rationalization charges totaling
$0.64 per diluted share.
The Company also reiterated that, in the absence of compelling acquisitions, it
anticipates a $200 to $300 million reduction in debt over the next three years,
of which approximately $100 million is expected in 2004.
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SILGAN HOLDINGS
October 21, 2004
Page 5
The Company is currently in the process of developing its 2005 operating plan
and expects to issue earnings guidance for 2005 with its year-end press release.
At this point, the Company anticipates modestly improved results in both the
metal food container and plastic container businesses.
Conference Call
Silgan Holdings Inc. will hold a conference call to discuss the Company's
results for the third quarter of 2004 at 11:00 a.m. eastern time on October 21,
2004. The toll free number for domestic callers is (888) 482-0024, and the
number for international callers is (617) 801-9702. The pass code is 59380953.
For those unable to listen to the live call, a taped rebroadcast will be
available until 5:00 p.m. eastern time on October 30, 2004. To access the
rebroadcast, the toll free number for domestic callers is (888) 286-8010, and
the number for international callers is (617) 801-6888. The pass code is
41157466.
* * *
Silgan Holdings is a leading North American manufacturer of consumer goods
packaging products with annual net sales of approximately $2.3 billion in 2003.
Silgan operates 61 manufacturing facilities in the U.S. and Canada. In North
America, the Company is the largest supplier of metal containers for food
products and a leading supplier of plastic containers for personal care products
and of metal and plastic closures for food and beverage products.
Statements included in this press release which are not historical facts are
forward looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act
of 1934. Such forward looking statements are made based upon management's
expectations and beliefs concerning future events impacting the Company and
therefore involve a number of uncertainties and risks, including, but not
limited to, those described in the Company's Annual Report on Form 10-K for 2003
and other filings with the Securities and Exchange Commission. Therefore, the
actual results of operations or financial condition of the Company could differ
materially from those expressed or implied in such forward looking statements.
* * *
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SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the quarter and nine months ended September 30,
(Dollars in millions, except per share amounts)
Third Quarter Nine Months
------------- -----------
2004 2003 2004 2003
---- ---- ---- ----
Net sales ............................................. $784.8 $761.0 $1,854.5 $1,760.6
Cost of goods sold .................................... 679.1 658.8 1,614.8 1,538.6
------ ------ -------- --------
Gross profit ....................................... 105.7 102.2 239.7 222.0
Selling, general and administrative expenses .......... 28.6 28.1 82.6 79.8
Rationalization charges ............................... -- 7.7 1.2 7.7
------ ------ -------- --------
Income from operations ............................. 77.1 66.4 155.9 134.5
Interest and other debt expense before loss on
early extinguishment of debt ...................... 13.6 20.6 43.9 59.4
Loss on early extinguishment of debt .................. -- 1.0 -- 1.0
------ ------ -------- --------
Interest and other debt expense .................... 13.6 21.6 43.9 60.4
------ ------ -------- --------
Income before income taxes and equity
in losses of affiliate ......................... 63.5 44.8 112.0 74.1
Provision for income taxes ............................ 25.1 18.0 44.3 29.3
------ ------ -------- --------
Income before equity in losses of affiliate ........ 38.4 26.8 67.7 44.8
Equity in losses of affiliate, net of income taxes .... -- -- -- 0.3
------ ------ -------- --------
Net income ......................................... $ 38.4 $ 26.8 $ 67.7 $ 44.5
====== ====== ======== ========
Earnings per share:
Basic net income per share ......................... $2.09 $1.47 $3.69 $2.44
Diluted net income per share ....................... $2.06 $1.45 $3.64 $2.42
Cash dividends per common share ....................... $0.15 -- $0.30 --
Weighted average shares (000's):
Basic .............................................. 18,399 18,253 18,356 18,242
Diluted ............................................ 18,627 18,447 18,595 18,395
SILGAN HOLDINGS INC.
CONSOLIDATED SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
For the quarter and nine months ended September 30,
(Dollars in millions)
Third Quarter Nine Months
------------- -----------
2004 2003 2004 2003
---- ---- ---- ----
Net sales:
Metal food containers .......... $642.7 $621.7 $1,422.8 $1,335.1
Plastic containers ............. 142.1 139.3 431.7 425.5
------ ------ -------- --------
Consolidated ............... $784.8 $761.0 $1,854.5 $1,760.6
====== ====== ======== ========
Income from operations:
Metal food containers (a) ...... $ 69.2 $ 63.5 $ 123.6 $ 101.4
Plastic containers (b) ......... 9.8 4.3 37.8 37.1
Corporate ...................... (1.9) (1.4) (5.5) (4.0)
------ ------ -------- --------
Consolidated ............... $ 77.1 $ 66.4 $ 155.9 $ 134.5
====== ====== ======== ========
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
Sept. 30, Sept. 30, Dec. 31,
2004 2003 2003
---- ---- ----
Assets:
Cash .............................................. $ 22.9 $ 33.6 $ 12.1
Current assets .................................... 659.3 686.6 533.2
Property, plant and equipment, net ................ 792.9 809.1 817.8
Other assets ...................................... 259.4 272.4 258.0
-------- -------- --------
Total assets .................................. $1,734.5 $1,801.7 $1,621.1
======== ======== ========
Liabilities and stockholders' equity:
Current liabilities, excluding debt ............... $ 306.1 $ 285.3 $ 302.1
Current and long-term debt ........................ 1,055.7 1,214.1 1,002.6
Other liabilities ................................. 181.1 187.2 195.6
Stockholders' equity .............................. 191.6 115.1 120.8
-------- -------- --------
Total liabilities and stockholders' equity .... $1,734.5 $1,801.7 $1,621.1
======== ======== ========
(a) Includes rationalization charges of $0.9 million for the nine months ended
September 30, 2004 and rationalization charges of $0.6 million recorded for
the three and nine months ended September 30, 2003.
(b) Includes rationalization charges of $0.3 million for the nine months ended
September 30, 2004 and rationalization charges of $7.1 million recorded for
the three and nine months ended September 30, 2003.