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 STRONG SECOND QUARTER
EARNINGS; RAISES FULL YEAR 2005 EARNINGS OUTLOOK AND
ALSO INCREASES DEBT REDUCTION TARGET
STAMFORD, CT, July 28, 2005 -- Silgan Holdings Inc. (Nasdaq:SLGN), a leading
supplier of consumer goods packaging products, today reported second quarter
2005 net income of $15.4 million, or $0.82 per diluted share, as compared to
second quarter 2004 net income of $18.2 million, or $0.98 per diluted share. The
results for 2005 include a non-cash, pre-tax charge of $11.0 million, or $0.36
per diluted share net of tax, for the loss on early extinguishment of debt as a
result of the successful refinancing of the Company's senior secured credit
facility completed on June 30, 2005.
"We are pleased with our strong second quarter and first half performance," said
Greg Horrigan, Co-Chairman and Co-CEO. "We once again delivered significant
year-over-year gains in our metal food container business as a result of
investments and the continued improvement in our closures product line. We are
encouraged, as well, by the improved performance in our plastic container
business versus the first quarter of 2005," added Mr. Horrigan. "With the
benefit of the recent refinancing and the momentum achieved in the first half of
the year, we remain positive in
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July 28, 2005
Page 2
our full year outlook and accordingly have raised our 2005 earnings estimate and
debt reduction target," concluded Mr. Horrigan.
Net sales for the second quarter of 2005 were $581.2 million, an increase of
$29.9 million, or 5.4 percent, as compared to $551.3 million for the same period
in 2004. This increase was the result of higher average selling prices in both
the metal food and plastic container businesses, principally due to the pass
through of higher raw material costs.
Income from operations for the second quarter of 2005 was $49.5 million, an
increase of $4.3 million, or 9.5 percent, as compared to $45.2 million for the
second quarter of 2004. This increase was due to higher income from operations
in the metal food container business, partially offset by lower income from
operations in the plastic container business.
Interest and other debt expense before loss on early extinguishment of debt for
the second quarter of 2005 was $13.7 million, a decrease of $1.4 million as
compared to the same period in 2004. In addition, the Company incurred an $11.0
million non-cash, pre-tax charge to write-off unamortized debt issuance costs
resulting from the recent refinancing of the Company's senior secured credit
facility.
The effective tax rate for the second quarter of 2005 was 37.9 percent versus
39.5 percent in the same quarter last year. This decrease was primarily due to
the benefits of the manufacturing credit afforded under the American Jobs
Creation Act as well as the benefits of a tax initiative that was completed
during the quarter.
Metal Food Containers
Net sales of the metal food container business were $422.5 million for the
second quarter of 2005, an increase of $15.4 million, or 3.8 percent, over the
second quarter of 2004 primarily as a result of higher average selling prices
due to the pass through of increased raw material costs and an improved product
mix, partially offset by lower food can unit volume. The decline in food can
volumes was primarily the result of certain business from one customer that was
not retained upon contract renewal last year.
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July 28, 2005
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Income from operations of the metal food container business increased in the
second quarter of 2005 to $38.9 million as compared to $33.2 million for the
same period in 2004, and operating margin increased to 9.2 percent from 8.2
percent over the same periods. These increases were principally due to an
improved mix of products sold, continued benefits from rationalization and
integration activities at our manufacturing facilities, particularly in the
metal closures operations, and benefits from relatively higher capital spending
over the last several years. These favorable items were partially offset by
increases in other manufacturing costs.
Plastic Containers
Net sales of the plastic container business were $158.7 million in the second
quarter of 2005, an increase of $14.5 million, or 10.1 percent, as compared to
the second quarter of 2004. This increase was principally attributable to higher
average selling prices due to the pass through of higher resin costs.
Income from operations of the plastic container business for the second quarter
of 2005 was $12.9 million as compared to $14.1 million in the second quarter of
2004, and operating margin decreased to 8.1 percent from 9.8 percent over the
same periods. Income from operations and operating margin decreased primarily as
a result of higher employee benefit and other manufacturing costs.
Six Months
Net income for the first six months of 2005 was $28.3 million, or $1.51 per
diluted share, as compared to net income for the first six months of 2004 of
$29.3 million, or $1.58 per diluted share. Results for the first six months of
2005 included a loss on early extinguishment of debt of $11.0 million, or $0.36
per diluted share net of tax, related to the recent refinancing of the Company's
senior secured credit facility and rationalization charges totaling $0.5
million, or $0.02 per diluted share net of tax, as compared with rationalization
charges of $1.2 million, or $0.04 per diluted share net of tax, in the same
period a year ago.
Net sales for the first six months of 2005 increased $41.6 million, or 3.9
percent, to $1.11 billion as compared to $1.07 billion for the first six months
of 2004. This increase was largely the result
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July 28, 2005
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of higher average selling prices in both the metal food and plastic container
businesses, primarily as a result of the pass through of higher raw material
costs.
Income from operations for the first six months of 2005 was $83.1 million, an
increase of $4.3 million, or 5.5 percent, from the same period in 2004. The
increase in income from operations was primarily due to the effect of an
improved mix of products sold as well as continued benefits from rationalization
and integration activities at our manufacturing facilities, partially offset by
higher selling, general and administrative costs.
Interest and other debt expense before loss on early extinguishment of debt for
the first six months of 2005 was $26.0 million, a decrease of $4.3 million as
compared to the first six months of 2004.
Dividend
On June 15, 2005, the Company paid a quarterly cash dividend of $0.20 per share
to holders of record of common stock of the Company on June 1, 2005. This
dividend payment aggregated $3.7 million.
On July 26, 2005, the Board of Directors declared a $0.20 per share quarterly
cash dividend, payable on September 15, 2005 to holders of record of common
stock of the Company on September 1, 2005.
Outlook for 2005
The Company's previous earnings estimate of net income per diluted share for
2005 was $4.14 to $4.44, adjusted for the charge of $0.36 per diluted share for
the loss on early extinguishment of debt recorded in the second quarter of 2005.
Based on the year-to-date financial performance and the outlook for the back
half of 2005, the Company has increased its full year earnings estimate of net
income per diluted share from a range of $4.14 to $4.44 to a range of $4.34 to
$4.64. This estimate does not include the impact of potential rationalization
actions which the Company currently has under review. This estimate does include
the anticipated impact of the recent refinancing.
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July 28, 2005
Page 5
Additionally, the Company expects net income per diluted share for the third
quarter of 2005 to be in the range of $2.15 to $2.35, as compared to $2.06 in
the third quarter of 2004.
The Company also reiterated that, in the absence of compelling acquisitions, it
anticipates further reducing debt by approximately $125 million in the fourth
quarter of 2005 as compared with the year-end 2004 balance.
Conference Call
Silgan Holdings Inc. will hold a conference call to discuss the Company's
results for the second quarter of 2005 at 11:00 a.m. eastern time on Thursday,
July 28, 2005. The toll free number for domestic callers is (877) 502-9276, and
the number for international callers is (913) 981-5591. For those unable to
listen to the live call, a taped rebroadcast will be available until 5:00 p.m.
eastern time on August 8, 2005. To access the rebroadcast, the toll free number
for domestic callers is (888) 203-1112, and the number for international callers
is (719) 457-0820. The pass code is 7801040.
* * *
Silgan Holdings is a leading North American manufacturer of consumer goods
packaging products with annual net sales of $2.4 billion in 2004. Silgan
operates 60 manufacturing facilities in the U.S. and Canada. In North America,
Silgan is the largest supplier of metal containers for food products and a
leading supplier of plastic containers for personal care products and of metal,
composite and plastic vacuum 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 2004
and other filings with the Securities and Exchange Commission. Therefore, the
actual results of operations
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July 28, 2005
Page 6
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 six months ended June 30,
(Dollars in millions, except per share amounts)
Second Quarter Six Months
-------------- ----------
2005 2004 2005 2004
---- ---- ---- ----
Net sales ........................................... $581.2 $551.3 $1,111.2 $1,069.6
Cost of goods sold .................................. 503.4 479.6 971.2 935.7
------ ------ -------- --------
Gross profit ..................................... 77.8 71.7 140.0 133.9
Selling, general and administrative expenses ........ 28.1 26.3 56.4 53.9
Rationalization charges ............................. 0.2 0.2 0.5 1.2
------ ------ -------- --------
Income from operations ........................... 49.5 45.2 83.1 78.8
Interest and other debt expense before loss on
early extinguishment of debt ...................... 13.7 15.1 26.0 30.3
Loss on early extinguishment of debt ................ 11.0 -- 11.0 --
------ ------ -------- --------
Interest and other debt expense .................. 24.7 15.1 37.0 30.3
Income before income taxes ....................... 24.8 30.1 46.1 48.5
Provision for income taxes .......................... 9.4 11.9 17.8 19.2
------ ------ -------- --------
Net income ....................................... $ 15.4 $ 18.2 $ 28.3 $ 29.3
====== ====== ======== ========
Earnings per share:
Basic net income per share ....................... $0.83 $0.99 $1.53 $1.60
Diluted net income per share ..................... $0.82 $0.98 $1.51 $1.58
Cash dividends per common share ..................... $0.20 $0.15 $0.40 $0.15
Weighted average shares (000's):
Basic ............................................ 18,540 18,362 18,501 18,335
Diluted .......................................... 18,786 18,589 18,768 18,578
SILGAN HOLDINGS INC.
CONSOLIDATED SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
For the quarter and six months ended June 30,
(Dollars in millions)
Second Quarter Six Months
-------------- ----------
2005 2004 2005 2004
---- ---- ---- ----
Net sales:
Metal food containers ......... $422.5 $407.1 $ 796.6 $ 780.0
Plastic containers ............ 158.7 144.2 314.6 289.6
------ ------ -------- --------
Consolidated .............. $581.2 $551.3 $1,111.2 $1,069.6
====== ====== ======== ========
Income from operations:
Metal food containers (a) ..... $ 38.9 $ 33.2 $ 66.2 $ 54.4
Plastic containers (b) ........ 12.9 14.1 22.0 27.9
Corporate ..................... (2.3) (2.1) (5.1) (3.5)
------ ------ -------- --------
Consolidated .............. $ 49.5 $ 45.2 $ 83.1 $ 78.8
====== ====== ======== ========
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
June 30, June 30, Dec. 31,
2005 2004 2004
---- ---- ----
Assets:
Cash and cash equivalents ............................ $ 82.3 $ 23.9 $ 35.4
Current assets ....................................... 737.2 742.5 520.5
Property, plant and equipment, net ................... 776.1 802.7 792.9
Other assets, net .................................... 238.6 264.4 248.4
-------- -------- --------
Total assets ..................................... $1,834.2 $1,833.5 $1,597.2
======== ======== ========
Liabilities and stockholders' equity:
Current liabilities, excluding debt .................. $ 278.1 $ 279.8 $ 322.6
Current and long-term debt ........................... 1,104.6 1,204.5 841.7
Other liabilities .................................... 218.0 195.0 225.5
Stockholders' equity ................................. 233.5 154.2 207.4
-------- -------- --------
Total liabilities and stockholders' equity ....... $1,834.2 $1,833.5 $1,597.2
======== ======== ========
(a) Includes rationalization charges of $0.2 million and $0.9 million for the
three and six months ended June 30, 2004, respectively.
(b) Includes rationalization charges of $0.2 million in the second quarter of
2005 and $0.5 million and $0.3 million for the six months ended June 30,
2005 and 2004, respectively.