8-K
APTARGROUP, INC. (ATR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15\(d\) of the Securities Exchange Act of 1934
July 30, 2020
Date of Report \(Date of earliest event reported\)
AptarGroup, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-11846 | 36-3853103 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 265 Exchange Drive, Suite 100, Crystal Lake, Illinois 60014 | ||
| (Address of principal executive offices) |
Registrant’s telephone number, including area code: 815-477-0424.
| N/A |
|---|
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $.01 par value | ATR | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⃞
Item 2.02 Results of Operations and Financial Condition.
On July 30, 2020, AptarGroup, Inc. announced certain information related to its results of operations for the quarter and six months ended June 30, 2020. The press release regarding this announcement is furnished as Exhibit 99.1 hereto.
The information in Item 2.02 of this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1
Press release issued by AptarGroup, Inc. dated July 30, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AptarGroup, Inc. | ||
|---|---|---|
| Date: July 30, 2020 | By : | _/s/Robert W. Kuhn |
| Robert W. Kuhn<br><br> <br>Executive Vice President,<br><br> Chief Financial Officer and Secretary | ||
| Exhibit 99.1 | ||
| --- |
Aptar Reports Second Quarter 2020 Results
CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--July 30, 2020--AptarGroup, Inc. (NYSE:ATR) today reported second quarter results for 2020 and provided an update related to COVID-19 including the Company’s ability to supply essential products for critical industries and continued health and safety measures being implemented across its global facilities.
Second Quarter 2020 Summary
- Reported sales and core sales decreased 6% primarily due to the negative effects of COVID-19 on the beauty and beverage markets as well as passing on lower resin costs; negative currency effects were offset by contributions coming from acquisitions
- Reported sales growth of 7% and core sales growth of 6% in our Pharma segment was offset by decreases in reported sales and core sales in our Beauty + Home and Food + Beverage segments
- “Thank You Award” costs of $3.6 million (pretax) were included in second quarter reported and adjusted earnings; this one-time Award was granted to employees who made it possible for Aptar to continue to supply critical infrastructure industries during the initial phases of the COVID-19 crisis
- Reported earnings per share totaled $0.63 (a decrease of 44% compared to the prior year)
- Adjusted earnings per share totaled $0.80 (a decrease of 30% compared to the prior year)
- Reported net income totaled $42 million (a decrease of 43% compared to the prior year)
- Adjusted EBITDA totaled $137 million (a decrease of 15% compared to the prior year)
- Cash flow from operations was $228 million in the first half of 2020 (an increase of 3% compared to the prior year)
- Free cash flow was $105 million in the first half of 2020 (an increase of 9% compared to the prior year)
- Declared quarterly dividend of $0.36 per share
- Subsequent to the end of the quarter, Kimberly Y. Chainey joined Aptar as EVP General Counsel and is a member of the Executive Committee
COVID-19 Update
“We are proud to live up to our purpose and responsibility to society. Most of the products and solutions we make at Aptar play an important role in everyday life, maybe now more than ever,” said Stephan Tanda, Aptar President and CEO. “We all have these products in our homes, dispensing the medicines we take, the food we consume, and the beauty, personal care and household products we count on to get us through the day.”
Aptar is an essential supply chain partner, supporting industries such as pharmaceuticals and consumer products in the 20 countries in which we operate. Aptar’s facilities remain open and operating, albeit some at reduced capacity. “Our people have shown extreme perseverance and commitment to deliver our critical solutions to our customers during this time,” stated Tanda. “We are working very closely with our customers and remain flexible to meet their changing needs while maintaining execution capabilities for the upturn. We have received numerous expressions of appreciation from customers, thanking our people for rising to this challenge, and we will continue to do so while we focus on health and safety as our number one priority.”
Aptar continues to take strong health and safety measures across its global operations. The Company is providing masks to all employees working in its facilities and has escalated cleaning and sanitizing procedures. All employees are invited to a regular cadence of COVID-19 Town Hall calls and Aptar has issued a new remote and flexible work arrangement policy to ensure a minimum number of employees working in the office during this time.
Aptar is closely monitoring the changing dynamics around the world as countries continue to reopen their economies. The initial re-openings in many regions resulted in improved demand for some of Aptar’s products toward the end of the second quarter. While there has been positive recovery momentum in many countries, the recent rise in confirmed cases of COVID-19, especially in the U.S., has caused several local governments to reinstitute confinement protocols and this could impact the pace of economic recovery in the U.S. and elsewhere.
Second Quarter Results
For the quarter ended June 30, 2020, reported sales decreased 6% to $699 million compared to $743 million in the prior year. The headwinds from changes in currency rates were completely offset by revenue generated by recent acquisitions and therefore core sales also declined 6%.
| Second Quarter Segment Sales Analysis (Change Over Prior Year) | ||||
|---|---|---|---|---|
| Beauty + Home | Pharma | Food + Beverage | Total AptarGroup | |
| Core Sales Growth | (13%) | 6% | (15%) | (6%) |
| Acquisitions | 4% | 2% | 0% | 3% |
| Currency Effects ^(1)^ | (3%) | (1%) | (2%) | (3%) |
| Total Reported Sales Growth | (12%) | 7% | (17%) | (6%) |
| (1) - Currency effects are approximated by translating last year's amounts at this year's foreign exchange rates. |
Commenting on the quarter, Tanda said, “Our Pharma segment had another strong quarter, which partially offset declines in our Beauty + Home and Food + Beverage segments. Demand for our drug delivery and active packaging solutions rose across a variety of non-COVID-19 applications, further underscoring the long-term stability of our Pharma segment. Although demand increased for sanitizer dispensers, the beauty and the on-the-go beverage markets continued to be under significant pressure due to negative effects of COVID-19. Cost containment efforts contributed to our bottom line but were not enough to offset the negative effects from lower volumes caused by COVID-19.”
In the Pharma segment, sales increased to customers in the injectables, consumer health care and active packaging markets and offset declines in the prescription market, which faced challenging comparisons to the very strong prior year. In the Beauty + Home segment, the significant negative effects of COVID-19 on the beauty market were partially offset by an increase in sales to the personal care market related to hand sanitizers and liquid soaps. As retailers began to reopen in June, sales increased toward the end of the quarter to certain Beauty + Home customers. In the Food + Beverage segment, weak demand for single-serve premium bottled water and on-the-go functional drink products, due to COVID-19, resulted in significant sales declines in the beverage market. Also, lower custom tooling sales and the effects of passing through lower resin prices to customers also impacted the segment’s overall growth.
Aptar reported second quarter earnings per share of $0.63 compared to $1.12 during the same period a year ago. Current year adjusted earnings per share, excluding restructuring expenses and acquisition-related costs, were $0.80 and down 30% from the prior year adjusted earnings per share, including comparable exchange rates, of $1.14. Aptar recorded $3.6 million of pretax expense related to a one-time Thank You Award for our employees who contributed to our ability to supply critical solutions during the initial phases of the COVID-19 pandemic.
Year-to-Date Results
For the six months ended June 30, 2020, reported sales decreased approximately 4% to $1.42 billion from $1.49 billion a year ago. The headwinds from changes in currency rates were completely offset by revenue generated by recent acquisitions and therefore core sales also declined 4%.
| Six Months Year-to-Date Segment Sales Analysis (Change Over Prior Year) | ||||
|---|---|---|---|---|
| Beauty + Home | Pharma | Food + Beverage | Total AptarGroup | |
| Core Sales Growth | (11%) | 6% | (9%) | (4%) |
| Acquisitions | 2% | 3% | 0% | 2% |
| Currency Effects ^(1)^ | (3%) | (1%) | (2%) | (2%) |
| Total Reported Sales Growth | (12%) | 8% | (11%) | (4%) |
| (1) - Currency effects are approximated by translating last year's amounts at this year's foreign exchange rates. |
Tanda commented on the year-to-date results, “Our Pharma segment continued to report strong year-over-year core sales growth. Our Beauty + Home and Food + Beverage segments experienced a more difficult first half of the year primarily due to the impacts of COVID-19, however we saw progressive signs of improvement for Beauty + Home since the low point in April. Beauty + Home was negatively impacted by reduced orders due to lower prestige beauty sales. Food + Beverage experienced a decline due to lower on-the-go beverage and food service sales due to many people dining at home and the passing through of lower resin costs to customers.”
For the six months year-to-date, Aptar’s reported earnings per share were $1.47, and down 29%, compared to $2.08 reported a year ago. Current year adjusted earnings per share, which exclude restructuring costs and acquisition-related expenses, were $1.72 and down 21% from prior year adjusted earnings per share, including comparable exchange rates, of $2.18.
Strong Cash Flow
The Company generated $228 million of cash flow from operations in the first half of the year, an increase of 3% over $221 million in the prior year. The company generated $105 million of free cash flow (cash flow from operations less capital expenditures) for the first half of 2020, an increase of 9% over $96 million in the prior year, primarily due to a focus on working capital management. Tanda commented, “Despite lower net income, we were able to increase cash flow over the prior year. We continue to invest in our business for the long-term and our balance sheet remains strong.”
Outlook
“There is economic uncertainty in some of our markets, driven in part by the recent spike in COVID-19 cases in many regions of the world. We expect to see gradual improvement in the second half of the year although this will be heavily dependent on the pace and breadth of the resumption of travel activity, the reopening of retail stores and general consumer spending confidence,” said Tanda.
Aptar expects earnings per share for the third quarter of 2020, excluding any restructuring expenses and acquisition-related costs, to be in the range of $0.80 to $0.88. This guidance is based on an effective tax rate range of 28% to 30%.
Cash Dividend
As previously announced, the Board declared a quarterly cash dividend of $0.36 per share. The payment date is August 19, 2020, to stockholders of record as of July 29, 2020.
Open Conference Call
There will be a conference call on Friday, July 31, 2020 at 8:00 a.m. Central Time to discuss the Company’s second quarter results for 2020. 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.aptar.com. Replay of the conference call can also be accessed for a limited time on the Investor Relations page of the website.
About Aptar
Aptar is a global leader in the design and manufacturing of a broad range of drug delivery, consumer product dispensing and active packaging solutions. Aptar uses insights, design, engineering and science to create dosing, dispensing and protective packaging technologies for the world’s leading brands, in turn making a meaningful difference in the lives, looks, health and homes of millions of people around the world. Aptar’s innovative solutions and services serve a variety of end markets including pharmaceutical, beauty, personal care, home, food and beverage. Aptar is headquartered in Crystal Lake, Illinois and has 14,000 dedicated employees in 20 countries. For more information, visit www.aptar.com.
Presentation of Non-GAAP Information
This press release refers to certain non-GAAP financial measures, including current year adjusted earnings per share and adjusted EBITDA, which exclude the impact of business transformation charges (restructuring initiatives), acquisition-related expenses and certain purchase accounting adjustments related to acquisitions and investments. Core sales and adjusted earnings per share also neutralize the impact of foreign currency translation effects when comparing current results to the prior year. Non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures provided by other companies. Aptar’s management believes these non-GAAP financial measures provide useful information to our investors because they allow for a better period over period comparison of operating results by removing the impact of items that, in management’s view, do not reflect Aptar’s core operating performance. These non-GAAP financial measures also provide investors with certain information used by Aptar’s management when making financial and operational decisions. Free cash flow is calculated as cash provided by operating activities less capital expenditures. We use free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. We believe that it is meaningful to investors in evaluating our financial performance and measure our ability to generate cash internally to fund our initiatives. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial results but should be read in conjunction with the unaudited condensed consolidated statements of income and other information presented herein. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in the accompanying tables. Our outlook is provided on a non-GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled, such as exchange rates, or reliably predicted because they are not part of the Company's routine activities, such as restructuring and acquisition costs.
This press release contains forward-looking statements, including certain statements set forth under the “Outlook” section of this press release and statements regarding the anticipated impact of the COVID-19 pandemic. Words such as “expects,” “anticipates,” “believes,” “estimates,” “future,” “potential” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such 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 our beliefs as well as assumptions made by and information currently available to us. Accordingly, our actual results or other events may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in our operations and business environment including, but not limited to: outbreaks of pandemics, including the impact of the COVID-19 pandemic on our global supply chain and our global customers and operations; the successful integration of acquisitions and the achievement of the expected benefits of acquisitions and investments; the impact of tax reform legislation including changes in tax rates and other tax-related events or transactions that could impact our effective tax rate; the execution of the business transformation plan; economic conditions worldwide including potential deflationary or inflationary conditions or economic downturn or uncertainty in regions we rely on for growth as a result of the COVID-19 pandemic or otherwise; political conditions worldwide; significant fluctuations in foreign currency exchange rates; changes in customer and/or consumer spending levels; financial conditions of customers and suppliers; consolidations within our customer or supplier bases; fluctuations in the cost of materials, components and other input costs; the availability of raw materials and components; our ability to successfully implement facility expansions and new facility projects; our ability to increase prices, contain costs and improve productivity; changes in capital availability or cost, including interest rate fluctuations; volatility of global credit markets; cybersecurity threats that could impact our networks and reporting systems; fiscal and monetary policies and other regulations; direct or indirect consequences of acts of war or terrorism; and work stoppages due to labor disputes. For additional information on these and other risks and uncertainties, please see our filings with the Securities and Exchange Commission, including the discussion under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K and Form 10-Qs. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| 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, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net Sales | $ | 699,305 | $ | 742,661 | $ | 1,420,858 | $ | 1,487,121 | ||||
| Cost of Sales (exclusive of depreciation and amortization shown below) | 441,702 | 469,441 | 892,958 | 938,573 | ||||||||
| Selling, Research & Development and Administrative | 123,365 | 113,752 | 249,557 | 234,967 | ||||||||
| Depreciation and Amortization | 56,429 | 47,867 | 107,235 | 95,356 | ||||||||
| Restructuring Initiatives | 7,331 | 1,737 | 12,170 | 11,267 | ||||||||
| Operating Income | 70,478 | 109,864 | 158,938 | 206,958 | ||||||||
| Other Income/(Expense): | ||||||||||||
| Interest Expense | (8,734 | ) | (8,756 | ) | (17,122 | ) | (17,970 | ) | ||||
| Interest Income | 175 | 1,033 | 350 | 2,781 | ||||||||
| Equity in Results of Affiliates | (328 | ) | 9 | (1,127 | ) | (86 | ) | |||||
| Miscellaneous, net | (923 | ) | (49 | ) | (2,335 | ) | 417 | |||||
| Income before Income Taxes | 60,668 | 102,101 | 138,704 | 192,100 | ||||||||
| Provision for Income Taxes | 18,808 | 28,180 | 41,594 | 55,180 | ||||||||
| Net Income | $ | 41,860 | $ | 73,921 | $ | 97,110 | $ | 136,920 | ||||
| Net Income Attributable to Noncontrolling Interests | (21 | ) | (6 | ) | (18 | ) | (1 | ) | ||||
| Net Income Attributable to AptarGroup, Inc. | $ | 41,839 | $ | 73,915 | $ | 97,092 | $ | 136,919 | ||||
| Net Income Attributable to AptarGroup, Inc. per Common Share: | ||||||||||||
| Basic | $ | 0.65 | $ | 1.16 | $ | 1.51 | $ | 2.17 | ||||
| Diluted | $ | 0.63 | $ | 1.12 | $ | 1.47 | $ | 2.08 | ||||
| Average Numbers of Shares Outstanding: | ||||||||||||
| Basic | 64,262 | 63,471 | 64,135 | 63,219 | ||||||||
| Diluted | 66,384 | 66,232 | 66,246 | 65,842 |
| AptarGroup, Inc. | |||
|---|---|---|---|
| Condensed Consolidated Financial Statements (Unaudited) | |||
| (continued) | |||
| ( In Thousands) | |||
| Consolidated Balance Sheets | |||
| December 31, 2019 | |||
| ASSETS | |||
| Cash and Equivalents | 247,656 | $ | 241,970 |
| Receivables, net | 575,655 | 558,428 | |
| Inventories | 381,939 | 375,795 | |
| Other Current Assets | 138,321 | 115,048 | |
| Total Current Assets | 1,343,571 | 1,291,241 | |
| Net Property, Plant and Equipment | 1,097,920 | 1,087,678 | |
| Goodwill | 861,928 | 763,461 | |
| Other Assets | 510,597 | 419,739 | |
| Total Assets | 3,814,016 | $ | 3,562,119 |
| LIABILITIES AND EQUITY | |||
| Short-Term Obligations | 217,079 | $ | 110,247 |
| Accounts Payable, Accrued and Other Liabilities | 612,688 | 573,028 | |
| Total Current Liabilities | 829,767 | 683,275 | |
| Long-Term Obligations | 1,082,742 | 1,085,453 | |
| Deferred Liabilities | 255,521 | 221,139 | |
| Total Liabilities | 2,168,030 | 1,989,867 | |
| AptarGroup, Inc. Stockholders' Equity | 1,645,631 | 1,571,916 | |
| Noncontrolling Interests in Subsidiaries | 355 | 336 | |
| Total Equity | 1,645,986 | 1,572,252 | |
| Total Liabilities and Equity | 3,814,016 | $ | 3,562,119 |
All values are in US Dollars.
| AptarGroup, Inc. | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of Adjusted EBIT and Adjusted EBITDA to Net Income (Unaudited) | |||||||||||||||||
| ( In Thousands) | |||||||||||||||||
| Beauty + Home | Pharma | Food + Beverage | Corporate & Other | Net Interest | |||||||||||||
| Net Sales | 699,305 | 299,786 | 301,259 | 98,260 | - | - | |||||||||||
| Reported net income | 41,860 | ||||||||||||||||
| Reported income taxes | 18,808 | ||||||||||||||||
| Reported income before income taxes | 60,668 | (12,755 | ) | 85,467 | 8,519 | (12,004 | ) | (8,559 | ) | ||||||||
| Adjustments: | |||||||||||||||||
| Restructuring initiatives | 7,331 | 7,324 | (111 | ) | 75 | 43 | |||||||||||
| Transaction costs related to acquisitions | 3,207 | 3,207 | |||||||||||||||
| Purchase accounting adjustments related to acquisitions and investments | 3,252 | 2,959 | 293 | ||||||||||||||
| Adjusted earnings before income taxes | 74,458 | 735 | 85,649 | 8,594 | (11,961 | ) | (8,559 | ) | |||||||||
| Interest expense | 8,734 | 8,734 | |||||||||||||||
| Interest income | (175 | ) | (175 | ) | |||||||||||||
| Adjusted earnings before net interest and taxes (Adjusted EBIT) | 83,017 | 735 | 85,649 | 8,594 | (11,961 | ) | - | ||||||||||
| Depreciation and amortization | 56,429 | 25,939 | 18,617 | 9,191 | 2,682 | - | |||||||||||
| Purchase accounting adjustments included in Depreciation and amortization above | (2,867 | ) | (2,700 | ) | (167 | ) | |||||||||||
| Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) | 136,579 | $ | 23,974 | $ | 104,099 | $ | 17,785 | $ | (9,279 | ) | $ | - | |||||
| Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) | 19.5 | % | 8.0 | % | 34.6 | % | 18.1 | % | |||||||||
| Beauty + Home | Pharma | Food + Beverage | Corporate & Other | Net Interest | |||||||||||||
| Net Sales | 742,661 | 342,080 | 281,939 | 118,642 | - | - | |||||||||||
| Reported net income | 73,921 | ||||||||||||||||
| Reported income taxes | 28,180 | ||||||||||||||||
| Reported income before income taxes | 102,101 | 26,813 | 84,425 | 12,195 | (13,609 | ) | (7,723 | ) | |||||||||
| Adjustments: | |||||||||||||||||
| Restructuring initiatives | 1,737 | 1,259 | (113 | ) | 112 | 479 | |||||||||||
| Transaction costs related to acquisitions | 1,059 | 1,059 | |||||||||||||||
| Purchase accounting adjustments related to acquisitions and investments | 222 | 222 | |||||||||||||||
| Adjusted earnings before income taxes | 105,119 | 28,072 | 85,593 | 12,307 | (13,130 | ) | (7,723 | ) | |||||||||
| Interest expense | 8,756 | 8,756 | |||||||||||||||
| Interest income | (1,033 | ) | (1,033 | ) | |||||||||||||
| Adjusted earnings before net interest and taxes (Adjusted EBIT) | 112,842 | 28,072 | 85,593 | 12,307 | (13,130 | ) | - | ||||||||||
| Depreciation and amortization | 47,867 | 20,673 | 16,057 | 8,637 | 2,500 | - | |||||||||||
| Purchase accounting adjustments included in Depreciation and amortization above | (222 | ) | (222 | ) | |||||||||||||
| Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) | 160,487 | $ | 48,745 | $ | 101,428 | $ | 20,944 | $ | (10,630 | ) | $ | - | |||||
| Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) | 21.6 | % | 14.2 | % | 36.0 | % | 17.7 | % |
All values are in US Dollars.
| AptarGroup, Inc. | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of Adjusted EBIT and Adjusted EBITDA to Net Income (Unaudited) | |||||||||||||||||
| ( In Thousands) | |||||||||||||||||
| Beauty + Home | Pharma | Food + Beverage | Corporate & Other | Net Interest | |||||||||||||
| Net Sales | 1,420,858 | 624,346 | 598,455 | 198,057 | - | - | |||||||||||
| Reported net income | 97,110 | ||||||||||||||||
| Reported income taxes | 41,594 | ||||||||||||||||
| Reported income before income taxes | 138,704 | (5,647 | ) | 175,321 | 14,481 | (28,679 | ) | (16,772 | ) | ||||||||
| Adjustments: | |||||||||||||||||
| Restructuring initiatives | 12,170 | 12,231 | (142 | ) | 178 | (97 | ) | ||||||||||
| Transaction costs related to acquisitions | 4,591 | 4,591 | |||||||||||||||
| Purchase accounting adjustments related to acquisitions and investments | 4,642 | 3,221 | 1,421 | ||||||||||||||
| Adjusted earnings before income taxes | 160,107 | 14,396 | 176,600 | 14,659 | (28,776 | ) | (16,772 | ) | |||||||||
| Interest expense | 17,122 | 17,122 | |||||||||||||||
| Interest income | (350 | ) | (350 | ) | |||||||||||||
| Adjusted earnings before net interest and taxes (Adjusted EBIT) | 176,879 | 14,396 | 176,600 | 14,659 | (28,776 | ) | - | ||||||||||
| Depreciation and amortization | 107,235 | 46,525 | 36,508 | 18,533 | 5,669 | - | |||||||||||
| Purchase accounting adjustments included in Depreciation and amortization above | (3,367 | ) | (2,700 | ) | (667 | ) | |||||||||||
| Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) | 280,747 | $ | 58,221 | $ | 212,441 | $ | 33,192 | $ | (23,107 | ) | $ | - | |||||
| Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) | 19.8 | % | 9.3 | % | 35.5 | % | 16.8 | % | |||||||||
| Beauty + Home | Pharma | Food + Beverage | Corporate & Other | Net Interest | |||||||||||||
| Net Sales | 1,487,121 | 709,739 | 554,640 | 222,742 | - | - | |||||||||||
| Reported net income | 136,920 | ||||||||||||||||
| Reported income taxes | 55,180 | ||||||||||||||||
| Reported income before income taxes | 192,100 | 50,994 | 165,683 | 19,911 | (29,299 | ) | (15,189 | ) | |||||||||
| Adjustments: | |||||||||||||||||
| Restructuring initiatives | 11,267 | 9,528 | 213 | 622 | 904 | ||||||||||||
| Transaction costs related to acquisitions | 1,059 | 1,059 | |||||||||||||||
| Purchase accounting adjustments related to acquisitions and investments | 222 | 222 | |||||||||||||||
| Adjusted earnings before income taxes | 204,648 | 60,522 | 167,177 | 20,533 | (28,395 | ) | (15,189 | ) | |||||||||
| Interest expense | 17,970 | 17,970 | |||||||||||||||
| Interest income | (2,781 | ) | (2,781 | ) | |||||||||||||
| Adjusted earnings before net interest and taxes (Adjusted EBIT) | 219,837 | 60,522 | 167,177 | 20,533 | (28,395 | ) | - | ||||||||||
| Depreciation and amortization | 95,356 | 41,414 | 31,830 | 17,102 | 5,010 | - | |||||||||||
| Purchase accounting adjustments included in Depreciation and amortization above | (222 | ) | (222 | ) | |||||||||||||
| Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) | 314,971 | $ | 101,936 | $ | 198,785 | $ | 37,635 | $ | (23,385 | ) | $ | - | |||||
| Adjusted EBITDA margins (Adjusted EBITDA / Reported Net Sales) | 21.2 | % | 14.4 | % | 35.8 | % | 16.9 | % |
All values are in US Dollars.
| AptarGroup, Inc. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of Adjusted Earnings Per Diluted Share (Unaudited) | ||||||||||||
| (In Thousands, Except Per Share Data) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Income before Income Taxes | $ | 60,668 | $ | 102,101 | $ | 138,704 | $ | 192,100 | ||||
| Adjustments: | ||||||||||||
| Restructuring initiatives | 7,331 | 1,737 | 12,170 | 11,267 | ||||||||
| Transaction costs related to acquisitions | 3,207 | 1,059 | 4,591 | 1,059 | ||||||||
| Purchase accounting adjustments related to acquisitions and investments | 3,252 | 222 | 4,642 | 222 | ||||||||
| Foreign currency effects (1) | (1,136 | ) | (3,348 | ) | ||||||||
| Adjusted Earnings before Income Taxes | $ | 74,458 | $ | 103,983 | $ | 160,107 | $ | 201,300 | ||||
| Provision for Income Taxes | $ | 18,808 | $ | 28,180 | $ | 41,594 | $ | 55,180 | ||||
| Adjustments: | ||||||||||||
| Restructuring initiatives | 1,503 | 488 | 2,702 | 3,166 | ||||||||
| Transaction costs related to acquisitions | 481 | 53 | 689 | 53 | ||||||||
| Purchase accounting adjustments related to acquisitions and investments | 727 | 42 | 1,026 | 42 | ||||||||
| Foreign currency effects (1) | (314 | ) | (962 | ) | ||||||||
| Adjusted Provision for Income Taxes | $ | 21,519 | $ | 28,449 | $ | 46,011 | $ | 57,479 | ||||
| Net Income Attributable to Noncontrolling Interests | $ | (21 | ) | $ | (6 | ) | $ | (18 | ) | $ | (1 | ) |
| Net Income Attributable to AptarGroup, Inc. | $ | 41,839 | $ | 73,915 | $ | 97,092 | $ | 136,919 | ||||
| Adjustments: | ||||||||||||
| Restructuring initiatives | 5,828 | 1,249 | 9,468 | 8,101 | ||||||||
| Transaction costs related to acquisitions | 2,726 | 1,006 | 3,902 | 1,006 | ||||||||
| Purchase accounting adjustments related to acquisitions and investments | 2,525 | 180 | 3,616 | 180 | ||||||||
| Foreign currency effects (1) | (822 | ) | (2,386 | ) | ||||||||
| Adjusted Net Income Attributable to AptarGroup, Inc. | $ | 52,918 | $ | 75,528 | $ | 114,078 | $ | 143,820 | ||||
| Average Number of Diluted Shares Outstanding | 66,384 | 66,232 | 66,246 | 65,842 | ||||||||
| Net Income Attributable to AptarGroup, Inc. Per Diluted Share | $ | 0.63 | $ | 1.12 | $ | 1.47 | $ | 2.08 | ||||
| Adjustments: | ||||||||||||
| Restructuring initiatives | 0.09 | 0.02 | 0.14 | 0.12 | ||||||||
| Transaction costs related to acquisitions | 0.04 | 0.01 | 0.06 | 0.02 | ||||||||
| Purchase accounting adjustments related to acquisitions and investments | 0.04 | - | 0.05 | - | ||||||||
| Foreign currency effects (1) | (0.01 | ) | (0.04 | ) | ||||||||
| Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share | $ | 0.80 | $ | 1.14 | $ | 1.72 | $ | 2.18 | ||||
| (1) Foreign currency effects are approximations of the adjustment necessary to state the prior year earnings and earnings per share using current period foreign currency exchange rates. |
| AptarGroup, Inc. | ||||||||
|---|---|---|---|---|---|---|---|---|
| Reconciliation of Free Cash Flow to Net Cash Provided by Operations (Unaudited) | ||||||||
| (In Thousands) | ||||||||
| Three Months Ended | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2020 | 2019 | 2020 | 2019 | |||||
| Net Cash Provided by Operations | $ | 142,653 | $ | 143,504 | $ | 227,686 | $ | 221,140 |
| Less: | ||||||||
| Capital Expenditures | $ | 61,361 | $ | 73,032 | $ | 122,986 | $ | 124,774 |
| Free Cash Flow | $ | 81,292 | $ | 70,472 | $ | 104,700 | $ | 96,366 |
| AptarGroup, Inc. | ||||
|---|---|---|---|---|
| Reconciliation of Adjusted Earnings Per Diluted Share (Unaudited) | ||||
| (In Thousands, Except Per Share Data) | ||||
| Three Months Ending | ||||
| September 30, | ||||
| Expected 2020 | 2019 | |||
| Income before Income Taxes | $ | 82,273 | ||
| Adjustments: | ||||
| Restructuring initiatives | 6,019 | |||
| Transaction costs related to acquisitions | 708 | |||
| Purchase accounting adjustments related to acquisitions and investments | 647 | |||
| Foreign currency effects (1) | 2,225 | |||
| Adjusted Earnings before Income Taxes | $ | 91,872 | ||
| Provision for Income Taxes | $ | 25,504 | ||
| Adjustments: | ||||
| Restructuring initiatives | 1,691 | |||
| Transaction costs related to acquisitions | 101 | |||
| Purchase accounting adjustments related to acquisitions and investments | 123 | |||
| Foreign currency effects (1) | 690 | |||
| Adjusted Provision for Income Taxes | $ | 28,109 | ||
| Net Income Attributable to Noncontrolling Interests | $ | (19 | ) | |
| Net Income Attributable to AptarGroup, Inc. | $ | 56,750 | ||
| Adjustments: | ||||
| Restructuring initiatives | 4,328 | |||
| Transaction costs related to acquisitions | 607 | |||
| Purchase accounting adjustments related to acquisitions and investments | 524 | |||
| Foreign currency effects (1) | 1,535 | |||
| Adjusted Net Income Attributable to AptarGroup, Inc. | $ | 63,744 | ||
| Average Number of Diluted Shares Outstanding | 66,702 | |||
| Net Income Attributable to AptarGroup, Inc. Per Diluted Share (2) | $ | 0.85 | ||
| Adjustments: | ||||
| Restructuring initiatives | 0.06 | |||
| Transaction costs related to acquisitions | 0.01 | |||
| Purchase accounting adjustments related to acquisitions and investments | 0.01 | |||
| Foreign currency effects (1) | 0.02 | |||
| Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share (2) | $0.80 - $0.88 | $ | 0.95 | |
| (1) Foreign currency effects are approximations of the adjustment necessary to state the prior year earnings per share using foreign currency exchange rates as of June 30, 2020, with the exception of the euro for which a 1.15 rate was used. | ||||
| (2) AptarGroup’s expected earnings per share range for the third quarter of 2020 is based on an effective tax rate range of 28% to 30%. This tax rate range compares to our third quarter of 2019 effective tax rate of 31% on reported and adjusted earnings per share. |
Contacts
Investor Relations Contact:
Matt DellaMaria
matt.dellamaria@aptar.com
815-479-5530
Media Contact:
Katie Reardon
katie.reardon@aptar.com
815-479-5671