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Silgan Announces Second Quarter Earnings And Confirms Full Year 2012 Estimate

Stocks in this article: SLGN

Six Months

Net income for the first six months of 2012 was $43.3 million, or $0.62 per diluted share, as compared to net income for the first six months of 2011 of $77.3 million, or $1.10 per diluted share. Adjusted net income per diluted share for the first six months of 2012 was $1.06 versus $0.94 in the prior year period, after adjustments increasing net income per diluted share by $0.44 for the first six months of 2012 and adjustments decreasing net income per diluted share by $0.16 for the first six months of 2011.

Net sales for the first six months of 2012 increased $64.7 million, or 4.2 percent, to $1.59 billion as compared to $1.53 billion for the first six months of 2011. This increase was primarily due to the inclusion of net sales from the Vogel & Noot and Nestlé Purina PetCare steel can operations acquisitions, higher average selling prices in the metal container and plastic container businesses due to the pass through of higher raw material costs, higher unit volumes in the closures business principally for the single-serve beverage market in the U.S. and a favorable mix of products sold in the plastic container business. These increases were partially offset by the impact of unfavorable foreign currency translation of approximately $23.2 million, lower net sales in Europe due to weak economic conditions and a less favorable mix of products sold in the metal container business.

Income from operations for the first six months of 2012 was $134.4 million, a decrease of $13.7 million, or 9.3 percent, from the same period in 2011. This decrease was primarily a result of income of $25.2 million included in the first six months of 2011 in corporate selling, general and administrative expenses for proceeds received as a result of the termination of the Graham Packaging merger agreement, net of costs attributable to certain corporate development activities, volume declines and increased price pressure in Europe due to weak economic conditions, a less favorable mix of products sold in the metal container business and start-up costs for new metal container production facilities in eastern Europe and the Middle East. These decreases were partially offset by the favorable comparison of the year-over-year resin pass through lag effect, higher unit volumes in the closures business, a favorable mix of products sold in the plastic container business and improved manufacturing efficiencies and ongoing cost controls. In addition, rationalization charges were $3.7 million in the first six months of 2012 as compared to $4.1 million in the first six months of 2011, and results for 2011 included a $3.3 million charge related to the resolution of a past product liability dispute.

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