Exhibit 99.1
AptarGroup Reports Record Second Quarter Sales and Operating Income;
Increases Dividend and Boosts Shares Authorized for Repurchase
CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--July 19, 2006--AptarGroup,
Inc. (NYSE:ATR) today reported record second quarter sales and
operating income. The Company's Board of Directors also increased the
quarterly dividend by 10% and authorized the repurchase of an
additional 2 million shares of common stock.
SECOND QUARTER RESULTS
For the quarter ended June 30, 2006, sales increased 12% to a
record $398.6 million from $356.1 million in the prior year. Sales
from acquired companies and increased demand for AptarGroup's
dispensing systems across all business segments drove sales higher in
the quarter. Sales from acquired companies added approximately $25.7
million, or 7%, to AptarGroup's revenue. Movements in currency rates
had little effect on the second quarter sales.
Operating income, which included a negative impact of $2.1 million
related to the expensing of stock options that began in 2006,
increased to a record $43.8 million, up from $41.1 million a year ago.
Net income for the second quarter of 2006, including a $1.4 million
negative effect of expensing stock options, was $27.7 million compared
to $29.3 million a year ago, which included a positive effect of
reduced income taxes of approximately $3.2 million related to research
and development credits in the U.S. and tax changes in Italy. Diluted
earnings per share decreased to $.77 per share (including the negative
effect of $.04 per share related to expensing stock options) compared
to $.81 per share in the prior year (including the positive effect of
$.09 per share related to the reduced income taxes as described
above). Acquisitions contributed approximately $.02 per diluted share
to 2006 earnings.
SIX MONTHS RESULTS
For the six months ended June 30, 2006, sales increased 11% to a
record $774.1 million from $700.1 million in the prior year. Changes
in exchange rates had a negative impact on sales growth of
approximately 2%. Sales improved over the prior year due to recent
acquisitions, which added $51.3 million, or 7%, to AptarGroup's
revenue, as well as increased product and custom tooling sales.
Operating income, which included a negative impact of
approximately $9.2 million related to the expensing of stock options
that began in 2006, increased to a first half record of $76.2 million,
up from $75.5 million a year ago. Net income for the first half of
2006, including a $6.0 million negative effect of expensing stock
options, was $47.5 million compared to $51.4 million a year ago, which
included the positive effect of reduced income taxes of approximately
$3.2 million as described above. Diluted earnings per share decreased
to $1.31 per share (including the negative effect of $.17 per share
related to expensing stock options) compared to $1.41 per share
(including the positive effect of $.09 per share related to the
reduced income taxes as described above) in the prior year. For 2006,
acquisitions contributed approximately $.04 per diluted share to
earnings.
MANAGEMENT COMMENT
Commenting on the quarter, Carl A. Siebel, President and Chief
Executive Officer, said, "We are pleased to report record sales and
record operating income for the quarter in spite of the effect of
expensing stock options this year. We are seeing positive
contributions from the strategic acquisitions we made in the past year
and we are pleased that demand for our innovative dispensing systems
was strong in the quarter as sales were up over the prior year in each
of our segments."
Siebel added, "Our Beauty & Home segment sales grew due to
acquisitions and increased demand for our fragrance/cosmetic pumps and
sampling systems which more than offset soft aerosol valve sales to
the U.S. household market. While Pharma segment sales increased over
the prior year due to demand for our spray systems and pulmonary
devices, profits were negatively affected by higher quality compliance
costs. Closures segment sales increased primarily due to acquisitions
and the pass-through of raw material cost increases."
BUSINESS SEGMENT PERFORMANCE
For the quarter, Beauty & Home segment sales increased 18% to
$207.6 million from $175.9 million in the prior year and segment
income increased to $19.8 million from $15.6 million in the prior
year. For the first half of 2006, Beauty & Home segment sales
increased 13% to $402.9 million from $355.0 million in the prior year
and segment income increased to $36.4 million from $30.5 million in
the prior year. Acquisitions accounted for $20.6 million and $43.2
million of Beauty & Home segment sales growth in the quarter and first
six months, respectively.
Closures segment quarterly sales increased 8% to $109.4 million
from $101.7 million in the prior year and segment income decreased
slightly to $12.2 million from $12.3 million a year ago. Closures
segment sales for the first half of the year increased 9% to $214.9
million from $196.5 million in the prior year and segment income
increased to $22.7 million from $20.6 million a year ago. Acquisitions
accounted for $5.1 million and $8.1 million of Closures segment sales
growth in the quarter and first half of the year, respectively.
Pharma segment quarterly sales increased 4% to $81.5 million from
$78.4 million in the prior year and segment income decreased to $19.8
million from $20.3 million a year ago. Pharma segment sales for the
first half of the year increased 5% to $156.1 million from $148.5
million in the prior year and segment income increased slightly to
$36.9 million from $36.6 million a year ago.
OUTLOOK
Siebel commented, "Looking to the third quarter, we believe demand
for our dispensing systems across the different markets we serve, will
contribute to sales growth over prior year levels in each of our
business segments, before considering currency exchange rate
movements."
Siebel concluded, "While the competitive environment remains
challenging, we also face the rising costs of raw materials,
transportation, energy, and quality compliance, particularly in the
Pharma segment. However, these are not new challenges to us and we
will continue to aggressively control costs and as market conditions
allow, increase prices to mitigate the adverse effects of the
increased cost of doing business. We expect diluted earnings per share
for the third quarter of 2006, including the adverse effect of
expensing stock options of approximately $.04 per share, to be in the
range of $.74 to $.79 per share compared to $.69 per share in the
prior year."
CASH DIVIDEND INCREASE AND SHARE REPURCHASE PROGRAM
The Board of Directors increased the quarterly dividend by 10% to
$.22 per share, payable August 22, 2006 to shareholders of record as
of August 1, 2006. The increase brings the annual dividend rate to
$.88 per share from $.80 per share.
During the quarter, the Company repurchased approximately 346,000
shares of common stock leaving approximately 700,000 shares authorized
for repurchase at the end of the second quarter. The Board today
approved the repurchase of an additional 2 million shares.
Siebel commented, "Once again, our strong financial position and
cash generating ability allows us to return value to shareholders with
increased dividends and additional share repurchases. We are pleased
that with our strong balance sheet, we can improve shareholder value
with such actions and remain well positioned to take advantage of
strategic opportunities as they present themselves."
OPEN CONFERENCE CALL
There will be a conference call on Thursday July 20, 2006 at 8:00
a.m. CDT to discuss the Company's second quarter results for 2006. 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.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 at 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, 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, those related
to overall business conditions in the various markets in which
AptarGroup operates, the competitive marketplace, fiscal and monetary
policy, changes in foreign exchange rates, direct or indirect
consequences of acts of war or terrorism, labor relations and other
risks and uncertainties discussed from time to time in AptarGroup'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.
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(In Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
2006 (1) 2005 2006 (2) 2005
--------- --------- --------- ---------
Net Sales $398,625 $356,112 $774,093 $700,111
Cost of Sales (exclusive
of depreciation
shown below) 268,518 238,641 522,304 471,119
Selling, Research &
Development and
Administrative 58,087 51,060 120,457 102,700
Depreciation and Other
Amortization 28,250 25,282 55,163 50,814
--------- --------- --------- ---------
Operating Income 43,770 41,129 76,169 75,478
Other Income/(Expense):
Interest Expense (3,897) (3,026) (7,707) (5,764)
Interest Income 830 747 1,741 1,562
Equity in Results of
Affiliates 137 503 243 835
Minority Interests (86) 71 (132) 71
Miscellaneous, net (422) (533) (935) (838)
--------- --------- --------- ---------
Income before Income Taxes 40,332 38,891 69,379 71,344
Provision for Income Taxes 12,664 9,567 21,901 19,952
--------- --------- --------- ---------
Net Income $27,668 $29,324 $47,478 $51,392
========= ========= ========= =========
Net Income per Share - Basic $0.79 $0.83 $1.35 $1.45
========= ========= ========= =========
Net Income per Share - Diluted $0.77 $0.81 $1.31 $1.41
========= ========= ========= =========
Average Number of Shares -
Basic 35,039 35,226 35,057 35,431
Average Number of Shares -
Diluted 35,861 36,321 36,189 36,526
Notes to Condensed Consolidated Financial Statements:
(1) - For the second quarter 2006, the following amounts related to
stock option expenses are included in the respective lines of the
above table: Cost of Sales ($.2 million), Selling, Research &
Development and Administrative ($1.9 million), Income Before Income
Taxes ($2.1 million), Net Income ($1.4 million), and Net Income per
Share - Basic and Diluted ($.04 per share).
(2) - For the first six months of 2006, the following amounts related
to stock option expenses are included in the respective lines of the
above table: Cost of Sales ($.5 million), Selling, Research &
Development and Administrative ($8.7 million), Income Before Income
Taxes ($9.2 million), Net Income ($6.0 million), and Net Income per
Share - Basic and Diluted ($.17 per share).
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
CONSOLIDATED BALANCE SHEETS
June 30, 2006 December 31, 2005
ASSETS
Cash and Equivalents $121,897 $117,635
Receivables, net 318,290 260,175
Inventories 208,576 184,241
Other Current Assets 51,871 43,240
----------------- -----------------
Total Current Assets 700,634 605,291
Net Property, Plant and Equipment 574,181 536,820
Goodwill, net 202,090 184,763
Other Assets 30,023 30,445
----------------- -----------------
Total Assets $1,506,928 $1,357,319
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-Term Obligations $122,322 $102,103
Accounts Payable and Accrued
Liabilities 255,911 218,659
----------------- -----------------
Total Current Liabilities 378,233 320,762
Long-Term Obligations 142,324 144,541
Deferred Liabilities 86,541 82,628
----------------- -----------------
Total Liabilities 607,098 547,931
Stockholders' Equity 899,830 809,388
----------------- -----------------
Total Liabilities and
Stockholders' Equity $1,506,928 $1,357,319
================= =================
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
SEGMENT INFORMATION
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
SALES
Beauty & Home $211,113 $178,024 $409,035 $358,966
Closures 109,731 102,148 215,460 197,301
Pharma 81,686 78,862 156,643 149,576
Other 386 337 612 666
--------- --------- --------- ---------
Total Sales $402,916 $359,371 $781,750 $706,509
========= ========= ========= =========
INTERSEGMENT ELIMINATIONS
Beauty & Home $(3,530) $(2,140) $(6,144) $(3,975)
Closures (289) (411) (530) (819)
Pharma (225) (470) (568) (1,102)
Other (247) (238) (415) (502)
--------- --------- --------- ---------
Total Intersegment
Eliminations $(4,291) $(3,259) $(7,657) $(6,398)
========= ========= ========= =========
NET SALES
Beauty & Home $207,583 $175,884 $402,891 $354,991
Closures 109,442 101,737 214,930 196,482
Pharma 81,461 78,392 156,075 148,474
Other 139 99 197 164
--------- --------- --------- ---------
Total Net Sales $398,625 $356,112 $774,093 $700,111
========= ========= ========= =========
SEGMENT INCOME (1)
Beauty & Home $19,752 $15,585 $36,385 $30,481
Closures 12,186 12,349 22,723 20,611
Pharma 19,848 20,293 36,911 36,557
Corporate Expenses and
Other (2) (8,387) (7,057) (20,674) (12,103)
--------- --------- --------- ---------
Income before Interest and
Taxes 43,399 41,170 75,345 75,546
Less: Interest Expense, Net 3,067 2,279 5,966 4,202
--------- --------- --------- ---------
Income before Income Taxes $40,332 $38,891 $69,379 $71,344
========= ========= ========= =========
Notes to Condensed Consolidated Financial Statements:
(1) - The Company evaluates performance of its business units and
allocates resources based upon income before interest expense in
excess of interest income, stock option and corporate expenses, income
taxes and unusual items.
(2) - For the second quarter and first six months of 2006, Corporate
Expenses and Other includes the total amounts related to stock option
expenses of $2.1 million and $9.2 million, respectively.
CONTACT: AptarGroup, Inc.
Stephen J. Hagge, 815-477-0424