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TheStreet Open House

AptarGroup's CEO Discusses Q1 2012 Results - Earnings Call Transcript

I would now like to turn the conference over to Steve.

Stephen J. Hagge

Thanks, Matt, and good morning, everyone. The first quarter ended up very close to what we had expected, and we're off to a good beginning to 2012. Strong demand for innovative dispensing solutions helped us achieve record first quarter sales. It's encouraging that each of our segments grew their top lines over the prior year. Operating income increased slightly to a record first quarter level in spite of the increased level of custom tooling sales compared to a year ago, additional start-up cost associated with our newer facilities and unfavorable effects from the changes in currency exchange rates.

Our Beauty + Home segment, which constitutes about half of our revenue base, achieved core sales growth of 3%. Sales of our products to each of the markets served by this segment increased over the prior year. Operating margins were consistent with the prior year as product mix helped offset slightly higher custom tooling sales.

Our Pharma segment had a terrific quarter, with core sales growth of 8%. Demand for our nasal delivery systems with the -- from the prescription drug market was particularly strong, and we continue to grow our Consumer Health Care business even though at a slower pace than last year's exceptionally strong growth rate. Profitability remained toward the higher end of our historical range mainly due to the product mix and production efficiencies, which offset some of the start-up costs associated with our new Indian facility and the impact of higher custom tooling sales.

Our Food + Beverage segment completed the quarter with core sales of 11%, with 2% coming from increased custom tooling sales. Once again, we saw a very strong demand for innovative dispensing closures from the beverage market and steady growing demand from the food market.

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