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Silgan Announces Second Quarter Earnings And Confirms Full Year 2012 Estimate

Stocks in this article: SLGN

The Company is providing an estimate of adjusted net income per diluted share for the third quarter of 2012 in the range of $1.15 to $1.25. This estimate assumes lower net sales in the plastic container business primarily due to the accelerated volumes in the second quarter of 2012 as a result of anticipated customer shutdowns. In addition, given the uncertainties around the vegetable pack, the results of the back half of the year could be more likely to shift between third and fourth quarters. This estimate compares to adjusted net income per diluted share of $1.14 in the third quarter of 2011.

Conference Call

Silgan Holdings Inc. will hold a conference call to discuss the Company’s results for the second quarter of 2012 at 11:00 a.m. eastern time on July 25, 2012. The toll free number for those in the U.S. and Canada is (800) 967-7137, and the number for international callers is (719) 785-1763. For those unable to listen to the live call, a taped rebroadcast will be available through August 8, 2012. To access the rebroadcast, U.S. and Canadian callers should dial (888) 203-1112, and international callers should dial (719) 457-0820. The pass code is 2401981.

Silgan Holdings is a leading supplier of rigid packaging for consumer goods products with annual net sales of approximately $3.5 billion in 2011. Silgan operates 81 manufacturing facilities in North and South America, Europe and Asia. Silgan is a leading supplier of metal containers in North America and Europe, and a leading worldwide supplier of metal, composite and plastic vacuum closures for food and beverage products. In addition, Silgan is a leading supplier of plastic containers for personal care products in North America.

Statements included in this press release which are not historical facts are forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Such forward looking statements are made based upon management’s expectations and beliefs concerning future events impacting the Company and therefore involve a number of uncertainties and risks, including, but not limited to, those described in the Company’s Annual Report on Form 10-K for 2011 and other filings with the Securities and Exchange Commission. Therefore, the actual results of operations or financial condition of the Company could differ materially from those expressed or implied in such forward looking statements.

SILGAN HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

For the quarter and six months ended June 30,

(Dollars in millions, except per share amounts)

   

Second Quarter

Six Months

2012

 

2011

2012

 

2011

 
Net sales $ 821.6 $ 822.2 $ 1,590.0 $ 1,525.3
 
Cost of goods sold   706.3   705.3   1,360.6   1,306.4
 
Gross profit 115.3 116.9 229.4 218.9
 
Selling, general and administrative expenses 46.5 20.0 91.3 66.7
 
Rationalization charges   0.2   2.4   3.7   4.1
 
Income from operations 68.6 94.5 134.4 148.1
 
Interest and other debt expense before loss on
early extinguishment of debt 16.0 16.5 31.6 30.4
 
Loss on early extinguishment of debt   38.7   -   38.7   -
 
Interest and other debt expense 54.7 16.5 70.3 30.4
 
Income before income taxes 13.9 78.0 64.1 117.7
 
Provision for income taxes   3.3   26.8   20.8   40.4
 
Net income $ 10.6 $ 51.2 $ 43.3 $ 77.3
 
Earnings per share:
Basic net income per share $ 0.15 $ 0.73 $ 0.62 $ 1.10
Diluted net income per share $ 0.15 $ 0.73 $ 0.62 $ 1.10
 
Cash dividends per common share $ 0.12 $ 0.11 $ 0.24 $ 0.22
 
Weighted average shares (000’s):
Basic 69,719 70,145 69,834 70,064
Diluted 70,000 70,513 70,137 70,507
 

SILGAN HOLDINGS INC.

CONSOLIDATED SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

For the quarter and six months ended June 30,

(Dollars in millions)

   

Second Quarter

Six Months

2012

 

2011

2012

 

2011

Net sales:
Metal containers $ 479.7 $ 482.3 $ 924.6 $ 872.7
Closures 183.1 184.5 346.1 344.6
Plastic containers   158.8     155.4   319.3     308.0
Consolidated $ 821.6   $ 822.2 $ 1,590.0   $ 1,525.3
 
 
Income from operations:
Metal containers (a) $ 40.1 $ 42.9 $ 82.2 $ 81.2
Closures (b) 22.9 22.7 40.9 38.5
Plastic containers (c) 9.1 4.5 18.0 10.8
Corporate (d)   (3.5 )   24.4   (6.7 )   17.6
Consolidated $ 68.6   $ 94.5 $ 134.4   $ 148.1
 

SILGAN HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in millions)

     
June 30, June 30, Dec. 31,

2012

2011

2011

Assets:
Cash and cash equivalents $ 368.9 $ 127.5 $ 397.1
Trade accounts receivable, net 408.6 431.4 339.9
Inventories 741.4 742.5 554.2
Other current assets 53.5 54.5 42.6
Property, plant and equipment, net 1,036.8 1,085.4 1,064.7
Other assets, net   611.8   566.4   580.6
Total assets $ 3,221.0 $ 3,007.7 $ 2,979.1
 
Liabilities and stockholders’ equity:
Current liabilities, excluding debt $ 386.4 $ 508.2 $ 507.7
Current and long-term debt 1,781.5 1,492.4 1,376.3
Other liabilities 393.6 371.0 437.1
Stockholders’ equity   659.5   636.1   658.0
Total liabilities and stockholders’ equity $ 3,221.0 $ 3,007.7 $ 2,979.1
 

(a)

 

Includes new plant start-up costs of $1.9 million and $2.9 million for the three and six months ended June 30, 2012, respectively. Includes rationalization charges of $1.4 million for the three and six months ended June 30, 2011. Includes a charge for the resolution of a past product liability dispute of $3.3 million for the three and six months ended June 30, 2011.

 

(b)

Includes rationalization charges of $0.3 million for the three months ended June 30, 2011 and $2.1 million and $1.4 million for the six months ended June 30, 2012 and 2011, respectively.

 

(c)

Includes rationalization charges of $0.2 million and $0.7 million for the three months ended June 30, 2012 and 2011, respectively, and $1.6 million and $1.3 million for the six months ended June 30, 2012 and 2011, respectively.

 

(d)

Includes costs attributable to announced acquisitions of $0.7 million for the three and six months ended June 30, 2012. Includes income of $27.0 million and $25.2 million for the three and six months ended June 30, 2011, respectively, for proceeds received as a result of the termination of the Graham Packaging merger agreement, net of costs associated with certain corporate development activities.

 

SILGAN HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the six months ended June 30,

(Dollars in millions)

   

2012

2011

 
Cash flows provided by (used in) operating activities:
Net income $ 43.3 $ 77.3
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 83.4 79.4
Rationalization charges 3.7 4.1
Loss on early extinguishment of debt 38.7 -
Other changes that provided (used) cash, net of
effects from acquisitions:
Trade accounts receivable, net (77.0 ) (120.4 )
Inventories (193.7 ) (199.4 )
Trade accounts payable and other changes, net (17.6 ) 106.5
Contributions to domestic pension benefit plans   (76.0 )   -  
Net cash used in operating activities   (195.2 )   (52.5 )
 
Cash flows provided by (used in) investing activities:
Purchases of businesses, net of cash acquired (51.0 ) (264.4 )
Capital expenditures (59.4 ) (84.2 )
Proceeds from asset sales   0.3     3.1  
Net cash used in investing activities   (110.1 )   (345.5 )
 
Cash flows provided by (used in) financing activities:
Dividends paid on common stock (16.9 ) (15.6 )
Changes in outstanding checks – principally vendors (66.6 ) (99.5 )
Shares repurchased under authorized repurchase program (22.1 ) -
Net borrowings and other financing activities   382.7     465.4  
Net cash provided by financing activities   277.1     350.3  
 
Cash and cash equivalents:
Net decrease (28.2 ) (47.7 )
Balance at beginning of year   397.1     175.2  
Balance at end of period $ 368.9   $ 127.5  
 
SILGAN HOLDINGS INC.

RECONCILIATION OF ADJUSTED NET INCOME PER DILUTED SHARE (1)

(UNAUDITED)

For the quarter and six months ended June 30,

 

Table A

 

   

Second Quarter

Six Months

2012

 

2011

2012

 

2011

 
Net income per diluted share as reported $ 0.15 $ 0.73 $ 0.62 $ 1.10
 
Adjustments:
Rationalization charges

-

0.02 0.03 0.04
New plant start-up costs 0.02 - 0.03 -
Proceeds from termination of merger agreement - (0.37 ) - (0.37 )
Costs attributable to announced acquisitions 0.01 0.12 0.01 0.14
Loss on early extinguishment of debt 0.37 - 0.37 -
Resolution of product liability dispute   -   0.03     -   0.03  
Adjusted net income per diluted share $ 0.55 $ 0.53   $ 1.06 $ 0.94  
 
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET INCOME PER DILUTED SHARE (1)
(UNAUDITED)

For the quarter and year ended,

 

Table B

   

Third Quarter

Year Ended

September 30,

December 31,

Estimated

 

Actual

Estimated

 

Actual

   
Low High Low High

2012

2012

2011

2012

2012

2011

Net income per diluted share as estimated
for 2012 and as reported for 2011 $

1.11

$

1.21

$

1.12

$

2.27

$

2.37

$ 2.75
 
Adjustments:
Rationalization charges

0.02

0.02

0.01

0.09 0.09 0.07

New plant start-up costs

0.02

0.02

-

0.06

0.06

-
Proceeds from termination of merger agreement - - - - - (0.37 )

Costs attributable to announced acquisitions (2)

- - - 0.01 0.01 0.14
Loss on early extinguishment of debt - - 0.011 0.37 0.37 0.01
Resolution of product liability dispute   -   -   -   -   -   0.03  
Adjusted net income per diluted share
as estimated for 2012 and presented for 2011 $ 1.15 $ 1.25 $ 1.14 $ 2.80 $ 2.90 $ 2.63  
 

(1)

 

The Company has presented adjusted net income per diluted share for the periods covered by this press release, which measure is a Non-GAAP financial measure. The Company’s management believes it is useful to exclude rationalization charges, new plant start-up costs, proceeds from the termination of acquisition agreements, costs attributable to announced acquisitions, the loss on early extinguishment of debt and the impact from the resolution of a past product liability dispute from its net income per diluted share as calculated under U.S. generally accepted accounting principles because such Non-GAAP financial measure allows for a more appropriate evaluation of its operating results. While rationalization costs are incurred on a regular basis, management views these costs more as an investment to generate savings rather than period costs. Such Non-GAAP financial measure is not in accordance with U.S. generally accepted accounting principles and should not be considered in isolation but should be read in conjunction with the unaudited condensed consolidated statements of income and the other information presented herein. Additionally, such Non-GAAP financial measure should not be considered a substitute for net income per diluted share as calculated under U.S. generally accepted accounting principles and may not be comparable to similarly titled measures of other companies.

 

(2)

Costs attributable to announced acquisitions have not been estimated for future periods.

 




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