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Silgan Announces Record Third Quarter Earnings Per Share

Stocks in this article: SLGN

Net sales for the third quarter of 2012 were $1,139.5 million, a decrease of $8.5 million, or slightly under 1.0 percent, as compared to $1,148.0 million in 2011. This decrease was the result of lower net sales over the prior year period in the closures and plastic container businesses, partially offset by higher net sales in the metal container business.

Income from operations for the third quarter of 2012 was $132.4 million as compared to $136.1 million for the third quarter of 2011, and operating margin decreased to 11.6 percent from 11.9 percent over the same periods. The decrease in income from operations was primarily attributable to a decrease in income from operations in the metal container business, partially offset by an increase in income from operations in the plastic container business and lower selling, general and administrative expenses.

Interest and other debt expense before loss on early extinguishment of debt for the third quarter of 2012 was $16.0 million, a decrease of $0.3 million as compared to 2011. The third quarter of 2011 included a loss on early extinguishment of debt of $1.0 million as a result of the refinancing of the senior secured credit facility in July 2011.

The effective tax rate was 32.4 percent and 33.7 percent for the third quarters of 2012 and 2011, respectively. The effective tax rate for the third quarter of 2012 benefited from the resolution of certain issues with tax authorities and changes to statutory tax rates enacted in certain jurisdictions.

Metal Containers

Net sales of the metal container business were $814.1 million for the third quarter of 2012, an increase of $15.4 million, or 1.9 percent, as compared to $798.7 million in 2011. This increase was primarily due to an increase in unit volumes and higher average selling prices as a result of the pass through of higher raw material costs, partially offset by the impact of unfavorable foreign currency translation of approximately $12.0 million. Unit volumes increased in the third quarter of 2012 primarily as a result of an improved fresh vegetable pack in 2012 as compared to a weak vegetable pack in 2011 and net sales contributed from the recent acquisition of ÖntaƟ in Turkey.

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