News Details

CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--Nov. 1, 2018-- AptarGroup, Inc. (NYSE:ATR) today announced third quarter results.

Third Quarter 2018 Summary

• Reported sales increased 7%
• Core sales, excluding currency and acquisition effects, also rose 7%
• Reported earnings per share, including restructuring and acquisition costs, were $0.60
• Adjusted earnings per share, excluding restructuring and acquisition costs, increased 21% to $0.99, compared to prior year currency adjusted earnings per share of $0.82
• Reported net income, including restructuring and acquisition costs, decreased 27%
• Adjusted EBITDA, excluding restructuring and acquisition costs, increased 14%
• Beauty + Home and Food + Beverage segment margins were negatively impacted by rising raw material costs and the delay in passing through these increased costs
• Required change to highly inflationary accounting in Argentina also negatively impacted Beauty + Home margins
• CSP Technologies integration underway and proceeding well
• Business transformation progressing as planned

Third Quarter Results

For the quarter ended September 30, 2018, reported sales increased to $666 million compared to $624 million in the prior year. Core sales, excluding the negative impact from changes in currency exchange rates and positive acquisition effects, increased approximately 7%.

Commenting on the quarter, Stephan Tanda, President and CEO, said, “We reported another quarter of strong top line core growth across each segment and geographic region. This reflects our ongoing focus on our customers and the ways in which we help them win in their markets. Increased demand for our facial skin care and hair care dispensing solutions contributed to the growth in our Beauty + Home segment. Our Pharma segment continued to see strong demand for our proven drug delivery devices for allergy, ophthalmic and dermal treatments as well as for our value-adding components for the injectables market. In our Food + Beverage segment, we continued to grow across many categories including infant nutrition and bottled water. In spite of our growth in the quarter, some operating leverage was offset by the negative effects of the challenging inflationary environment we are facing, especially in our Beauty + Home and Food + Beverage segments. Regarding the integration of CSP Technologies, we are very pleased with the progress thus far and remain enthusiastic about the future potential to leverage CSP’s active packaging technologies across many areas of our business.”

Aptar reported earnings per share, including restructuring and acquisition costs, of $0.60 compared to $0.83 reported a year ago. Current year adjusted earnings per share, excluding restructuring and acquisition costs, were $0.99 and up 21% from the prior year adjusted earnings per share, adjusted for comparable exchange rates, of $0.82. Prior year adjusted earnings per share would have been approximately $0.02 lower had our current effective tax rate been applied to prior year adjusted earnings.

Year-to-Date Results

For the nine months ended September 30, 2018, reported sales increased 13% to $2.08 billion from $1.84 billion a year ago. Core sales, excluding the positive impact from changes in currency exchange rates and acquisition effects, increased approximately 9%.

Tanda commented on the year-to-date results, “We have made significant progress on our top line this year with robust growth across each segment and in each geographic region. We continue to execute our strategy and our business transformation in parallel with market strength in several areas in which we are the leader. Excluding restructuring and acquisition costs, we have also delivered strong operating results for the year to date.”

For the nine months year-to-date, Aptar reported earnings per share, including restructuring and acquisitions costs, of $2.38 compared to $2.64 reported a year ago. Current year adjusted earnings per share, which exclude restructuring and acquisition costs, were $3.07 and up 11% from prior year adjusted earnings per share, adjusted for comparable exchange rates, of $2.77. Prior year adjusted earnings per share would have been approximately $0.12 lower had our current effective tax rate been applied to prior year adjusted earnings.

Business Transformation

Aptar remains on track with its business transformation to become a more agile, competitive and customer-centric business. Tanda commented on the progress by stating, “Our people have completed a tremendous amount of work and they continue to implement various initiatives according to our plan. We are starting to see gradual incremental improvements in our Beauty + Home business. This is a three year program that will enable us to become more agile and act with an even greater entrepreneurial spirit to drive profitable growth.”

Outlook

Commenting on Aptar’s outlook, Tanda said, “We are very pleased with the CSP Technologies acquisition integration and overall performance of that business. In addition, we expect top line core growth in each segment in spite of a difficult comparison to our very strong prior year fourth quarter, when each segment posted double digit core sales growth. However, we expect the inflationary environment to continue and raw material and transportation costs are expected to weigh on margins due to the normal delay in passing on these increased costs. Further, we anticipate isolated weaker beverage volumes in China. While we are addressing the near-term challenges, most of which are transitory, our focus remains on long-term strategic priorities including profitable, organic core sales growth, attracting the best talent, achieving excellence in our core competencies, successfully completing our business transformation and entering into new strategic partnerships. In parallel, we are building teams and capabilities to expand our presence and capture value in high-growth economies such as those in Asia. With our motivated and experienced team, entrepreneurial spirit, customer-centric approach and the industry’s broadest portfolio of differentiated solutions, we are well positioned for long-term growth.”

Aptar expects earnings per share for the fourth quarter, excluding any restructuring and acquisition costs, to be in the range of $0.81 to $0.86 and this guidance is based on an effective tax rate range of 30% to 32%. The midrange of this guidance represents an 18% increase over the prior year adjusted earnings per share had our current effective tax rate been applied to prior year adjusted earnings per share. Prior year reported earnings per share of $0.77 included a gain on insurance recovery, restructuring expenses and the impact of the tax reform legislation enacted in the fourth quarter of last year. Excluding these effects and adjusting for comparable exchange rates, prior year adjusted earnings per share were $0.78. Prior year adjusted earnings per share would have been approximately $0.07 lower had our current effective tax rate been applied to prior year adjusted earnings.

Cash Dividend

As previously reported, the Board declared on October 18, 2018 a quarterly cash dividend of $0.34 per share. The payment date is November 21, 2018, to stockholders of record as of October 31, 2018.

Open Conference Call

There will be a conference call on Friday, November 2, 2018 at 8:00 a.m. Central Time to discuss the Company’s third quarter results for 2018. 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.

Aptar is a leading global supplier of a broad range of innovative dispensing, sealing and active packaging solutions for the beauty, personal care, home care, prescription drug, consumer health care, injectables, food and beverage markets. Aptar uses insights, design, engineering and science to create innovative packaging technologies that build brand value for its customers, and, in turn, make a meaningful difference in the lives, looks, health and homes of people around the world. Aptar is headquartered in Crystal Lake, Illinois and has over 13,000 dedicated employees in 18 different 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 restructuring costs, acquisition costs and purchase accounting adjustments that affected inventory values. 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. 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 tax and 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” and “Business Transformation” sections of this press release. 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 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: the successful integration of the CSP Technologies business; 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; the impact and extent of contamination found at the Company’s facility in Brazil; economic conditions worldwide including potential deflationary and inflationary conditions in regions we rely on for growth; 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; work stoppages due to labor disputes; and competition, including technological advances. 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-Ks and Form 10-Qs. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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Source: AptarGroup, Inc.

AptarGroup, Inc.
Investor Relations Contact:
Matt DellaMaria
matt.dellamaria@aptar.com
815-477-0424
or
Media Contact:
Katie Reardon
katie.reardon@aptar.com
815-477-0424