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 FIRST QUARTER EARNINGS AND
RAISES FULL YEAR 2007 EARNINGS ESTIMATE
STAMFORD, CT, April 26, 2007-- Silgan Holdings Inc. (Nasdaq:SLGN), a leading
supplier of consumer goods packaging products, today reported record first
quarter 2007 net income of $28.5 million, or $0.75 per diluted share, as
compared to first quarter 2006 net income of $17.2 million, or $0.45 per diluted
share. Results for 2007 included a pre-tax rationalization charge of $1.1
million, or $0.02 per diluted share net of tax. Results for 2006 included a
pre-tax rationalization charge of $2.2 million, or $0.03 per diluted share net
of tax. A reconciliation of net income per diluted share to "adjusted net income
per diluted share," a Non-GAAP financial measure used by the Company which
adjusts net income per share for certain items, can be found in Tables 4 and 5
at the back of this press release.
"Each of our businesses had a strong start in 2007. The impact of our 2006
acquisitions, continued focus on cost reductions, improving manufacturing
efficiencies and recovery of significant cost inflation experienced over the
past year has translated to significant profit improvement during the first
quarter," said Tony Allott, President and CEO. "Results for our metal food
container business benefited from the contractual pass through of prior year
inflation, a provisional inventory build and stronger operating performance.
Results in our closures
(more)
SILGAN HOLDINGS
April 26, 2007
Page 2
business benefited from the addition of the international operations.
Additionally, our plastic container business outperformed a strong first quarter
of 2006 as a result of ongoing benefits from our cost reduction programs and the
inclusion of the recently acquired Cousins-Currie business," Mr. Allott
continued. "While some of the strength in the first quarter earnings was driven
by timing, we are raising our 2007 full year earnings estimate by $0.05 per
share based on our first quarter performance and our operational outlook," Mr.
Allott concluded.
Net sales for the first quarter of 2007 were $650.8 million, an increase of
$80.9 million, or 14.2 percent, as compared to $569.9 million for the same
period in 2006. This increase was primarily due to the inclusion of the
acquisitions completed in 2006 and higher average selling prices resulting from
the pass through of inflation in raw material and other manufacturing costs in
the metal food container and closures businesses.
Income from operations for the first quarter of 2007 was $62.1 million, an
increase of $22.5 million, as compared to $39.6 million for the first quarter of
2006. This increase was a result of higher income from operations across each
operating segment, largely as a result of the acquisitions completed in 2006,
continued benefits of cost reductions and the contractual pass through of
inflation in other manufacturing costs and the benefits resulting from a
provisional inventory build in the metal food container business.
Interest and other debt expense for the first quarter of 2007 was $16.1 million,
an increase of $4.8 million as compared to the same period in 2006. This
increase was due to higher average borrowings as a result of the 2006
acquisitions and the effects of higher market interest rates.
Metal Food Containers
Net sales of the metal food container business were $345.6 million for the first
quarter of 2007, an increase of $10.8 million, or 3.2 percent, over the first
quarter of 2006 primarily as a result of higher average selling prices due to
the pass through of inflation in raw material and other manufacturing costs.
(more)
SILGAN HOLDINGS
April 26, 2007
Page 3
Income from operations of the metal food container business increased in the
first quarter of 2007 to $28.8 million as compared to $18.2 million for the same
period in 2006 due primarily to improved manufacturing performance and ongoing
cost reduction initiatives, the lagged contractual pass through beginning in the
latter part of 2006 of significant inflation in other manufacturing costs and
benefits derived from a provisional inventory build during the quarter in
advance of union contract negotiations and plant rationalizations. These
benefits were slightly offset by pre-tax rationalization charges of $1.1 million
for the ongoing costs associated with the plans to close the St. Paul, Minnesota
and Stockton, California metal food container facilities. As a result, operating
margin increased significantly to 8.3 percent from 5.4 percent over the same
periods.
Plastic Containers
Net sales of the plastic container business were $162.4 million in the first
quarter of 2007, essentially flat versus the same period a year ago. The
inclusion of sales from Cousins-Currie which was acquired in December 2006 was
offset by lower average selling prices as a result of the pass through to
customers of lower raw material costs and by the impact from the rationalization
of the Valencia, California manufacturing facility in the second quarter of
2006.
Income from operations of the plastic container business for the first quarter
of 2007 was $19.8 million as compared to $13.8 million in the first quarter of
2006, and operating margin increased to 12.2 percent from 8.5 percent over the
same periods. Income from operations and operating margin increased primarily as
a result of continued cost reductions including from the closing of the
Valencia, California manufacturing facility, the impact from the Cousins-Currie
acquisition and rationalization charges in 2006 of $2.2 million.
Closures
Net sales of the closures business were $142.8 million in the first quarter of
2007, an increase of $70.9 million over the first quarter of 2006 primarily as a
result of the international closures acquisitions during 2006.
(more)
SILGAN HOLDINGS
April 26, 2007
Page 4
Income from operations of the closures business increased in the first quarter
of 2007 to $15.8 million as compared to $10.6 million for the same period in
2006 due primarily to the inclusion of the acquired international closures
operations. Operating margin for the first quarter of 2007 decreased to 11.1
percent from 14.7 percent for the same period in 2006 due primarily to the
inclusion of the international operations, which generally incur selling,
general and administrative expenses at a higher percentage of sales as compared
to the domestic operations.
Dividend
On March 19, 2007, the Company paid a quarterly cash dividend in the amount of
$0.16 per share to holders of record of common stock of the Company on March 5,
2007. This dividend payment aggregated $6.1 million.
Outlook for 2007
Based on the first quarter financial performance and the outlook for the
remainder of 2007, the Company has raised its "adjusted net income per diluted
share" estimate for 2007 by $0.05 to a range of $3.15 to $3.25 per diluted
share. While the first quarter financial performance significantly exceeded the
high-end of the Company's first quarter estimate, the current full year estimate
includes an offset to earnings of approximately $0.20 per diluted share for the
remainder of the year related to reducing provisional inventory post-union
contract negotiations and plant closures.
The Company expects "adjusted net income per diluted share" for the second
quarter of 2007 to be in the range of $0.65 to $0.75, as compared to adjusted
net income per diluted share of $0.53 in the second quarter of 2006.
(more)
SILGAN HOLDINGS
April 26, 2007
Page 5
Conference Call
Silgan Holdings Inc. will hold a conference call to discuss the Company's
results for the first quarter of 2007 at 11:00 a.m. eastern time on Thursday,
April 26, 2007. The toll free number for domestic callers is (800) 479-9001, and
the number for international callers is (719) 457-2618. For those unable to
listen to the live call, a taped rebroadcast will be available until 5:00 p.m.
eastern time on May 4, 2007. 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 9384496.
* * *
Silgan Holdings is a leading North American manufacturer of consumer goods
packaging products with annual net sales of approximately $2.7 billion in 2006.
Silgan operates 69 manufacturing facilities in North and South America, Europe
and Asia. 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. In addition, Silgan is a leading worldwide supplier 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 2006
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.
* * *
(more)
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the quarter ended March 31,
(Dollars in millions, except per share amounts)
2007 2006
---- ----
Net sales $650.8 $569.9
Cost of goods sold 550.7 498.6
------ ------
Gross profit 100.1 71.3
Selling, general and administrative expenses 36.9 29.5
Rationalization charges 1.1 2.2
------ ------
Income from operations 62.1 39.6
Interest and other debt expense 16.1 11.3
------ ------
Income before income taxes 46.0 28.3
Provision for income taxes 17.5 11.1
------ ------
Net income $ 28.5 $ 17.2
====== ======
Earnings per share:
Basic net income per share $0.76 $0.46
Diluted net income per share $0.75 $0.45
Cash dividends per common share $0.16 $0.12
Weighted average shares (000's):
Basic 37,613 37,271
Diluted 38,105 37,829
SILGAN HOLDINGS INC.
CONSOLIDATED SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
For the quarter ended March 31,
(Dollars in millions)
2007 2006
---- ----
Net sales:
Metal food containers (a) $345.6 $334.8
Plastic containers 162.4 163.2
Closures (a) 142.8 71.9
------ ------
Consolidated $650.8 $569.9
====== ======
Income from operations:
Metal food containers (a) (b) $ 28.8 $ 18.2
Plastic containers(c) 19.8 13.8
Closures (a) 15.8 10.6
Corporate (2.3) (3.0)
------ ------
Consolidated $ 62.1 $ 39.6
====== ======
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
March 31, March 31, Dec. 31,
2007 2006 2006
---- ---- ----
Assets:
Cash and cash equivalents $ 22.9 $ 8.4 $ 16.7
Trade accounts receivable, net 274.7 215.5 232.4
Inventories 495.2 386.2 426.6
Other current assets 37.1 25.1 42.1
Property, plant and equipment, net 904.9 753.2 894.6
Other assets, net 409.3 255.2 396.0
-------- -------- --------
Total assets $2,144.1 $1,643.6 $2,008.4
======== ======== ========
Liabilities and stockholders' equity:
Current liabilities, excluding debt $ 331.0 $ 264.2 $ 406.6
Current and long-term debt 1,135.3 857.0 955.6
Other liabilities 284.6 236.6 279.7
Stockholders' equity 393.2 285.8 366.5
-------- -------- --------
Total liabilities and stockholders' equity $2,144.1 $1,643.6 $2,008.4
======== ======== ========
(a) Prior year results have been restated to present our new Closures
segment.
(b) Includes rationalization charges of $1.1 million in 2007.
(c) Includes rationalization charge of $2.2 million in 2006.
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET INCOME PER DILUTED SHARE (1)
(UNAUDITED)
For the quarter ended March 31,
Table 4
-------
First Quarter
2007 2006
---- ----
Net income per diluted share as reported $0.75 $0.45
Adjustments:
Rationalization charges, net of tax 0.02 0.03
----- -----
Adjusted net income per diluted share $0.77 $0.48
===== =====
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET INCOME PER DILUTED SHARE (1)
(UNAUDITED)
For the quarter and year ended,
Table 5
-------
Second Quarter Year Ended
-------------- ----------
June 30, December 31,
-------- ------------
Estimated Actual Estimated Actual
--------- ------ --------- ------
Low High Low High
2007 2007 2006 2007 2007 2006
---- ---- ---- ---- ---- ----
Net income per diluted share as estimated
for 2007 and as reported for 2006 $0.63 $0.73 $0.43 $3.08 $3.18 $2.74
Adjustments:
Rationalization charges, net of tax 0.02 0.02 0.10 0.07 0.07 0.29
Cumulative prior year benefit of
R&D tax credits - - - - - (0.15)
----- ----- ----- ----- ----- -----
Adjusted net income per diluted share
as estimated for 2007 and presented for 2006 $0.65 $0.75 $0.53 $3.15 $3.25 $2.88
===== ===== ===== ===== ===== =====
(1) The Company has presented adjusted net income per diluted share for the
periods covered by this press release, which measure is a Non-GAAP financial
measure. The Company's management believes it is useful to exclude
rationalization charges and the cumulative effect of prior year tax benefits
recorded in 2006 attributable to tax initiatives completed during 2006 from its
net income per diluted share as calculated under U.S. generally accepted
accounting principles because such Non-GAAP financial measure allows for a more
appropriate evaluation of its operating results. While rationalization costs are
incurred on a regular basis, management views these costs more as an investment
to generate savings rather than period costs. Such Non-GAAP financial measure is
not in accordance with U.S. generally accepted accounting principles and should
not be considered in isolation but should be read in conjunction with the
unaudited condensed consolidated statements of income and the other information
presented herein. Additionally, such Non-GAAP financial measure should not be
considered a substitute for net income per diluted share as calculated under
U.S. generally accepted accounting principles and may not be comparable to
similarly titled measures of other companies.