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Silgan Announces Record Third Quarter Earnings Per Share

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 82 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 food and 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 nine months ended September 30,

(Dollars in millions, except per share amounts)

 
     

Third Quarter

             

Nine Months

2012

     

2011

2012

             

2011

 
Net sales $ 1,139.5 $ 1,148.0 $ 2,729.5 $ 2,673.3
 
Cost of goods sold   960.7   965.0   2,321.4   2,271.5
 
Gross profit 178.8 183.0 408.1 401.8
 
Selling, general and administrative expenses 44.3 46.3 135.5 112.8
 
Rationalization charges   2.1   0.6   5.8   4.8
 
Income from operations 132.4 136.1 266.8 284.2
 
Interest and other debt expense before loss on
early extinguishment of debt 16.0 16.3 47.6 46.7
 
Loss on early extinguishment of debt   -   1.0   38.7   1.0
 
Interest and other debt expense 16.0 17.3 86.3 47.7
 
Income before income taxes 116.4 118.8 180.5 236.5
 
Provision for income taxes   37.7   40.0   58.5   80.4
 
Net income $ 78.7 $ 78.8 $ 122.0 $ 156.1
 
Earnings per share:
Basic net income per share $ 1.13 $ 1.13 $ 1.75 $ 2.23
Diluted net income per share $ 1.13 $ 1.12 $ 1.74 $ 2.22
 
Cash dividends per common share $ 0.12 $ 0.11 $ 0.36 $ 0.33
 
Weighted average shares (000’s):
Basic 69,375 69,981 69,679 70,036
Diluted 69,685 70,320 69,984 70,444
 
           

SILGAN HOLDINGS INC.

CONSOLIDATED SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

For the quarter and nine months ended September 30,

(Dollars in millions)

 
                 

Third Quarter

             

Nine Months

2012

           

2011

2012

             

2011

Net sales:
Metal containers $ 814.1 $ 798.7 $ 1,738.7 $ 1,671.4
Closures 182.7 189.5 528.8 534.1
Plastic containers   142.7     159.8     462.0     467.8
Consolidated $ 1,139.5   $ 1,148.0   $ 2,729.5   $ 2,673.3
 
 
Income from operations:
Metal containers (a) $ 103.5 $ 111.7 $ 185.6 $ 193.0
Closures (b) 24.1 24.4 65.1 62.9
Plastic containers (c) 6.2 3.8 24.2 14.6
Corporate (d)   (1.4 )   (3.8 )   (8.1 )   13.7
Consolidated $ 132.4   $ 136.1   $ 266.8   $ 284.2
 
   

SILGAN HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in millions)

            Sept. 30,         Sept. 30,         Dec. 31,

2012

2011

2011

Assets:
Cash and cash equivalents $ 422.5 $ 140.5 $ 397.1
Trade accounts receivable, net 597.7 579.5 339.9
Inventories 561.5 580.4 554.2
Other current assets 51.6 45.2 42.6
Property, plant and equipment, net 1,092.6 1,071.4 1,064.7
Other assets, net   816.1   602.6   580.6
Total assets $ 3,542.0 $ 3,019.6 $ 2,979.1
 
Liabilities and stockholders’ equity:
Current liabilities, excluding debt $ 407.3 $ 503.7 $ 507.7
Current and long-term debt 1,989.7 1,431.0 1,376.3
Other liabilities 408.7 417.4 437.1
Stockholders’ equity   736.3   667.5   658.0
Total liabilities and stockholders’ equity $ 3,542.0 $ 3,019.6 $ 2,979.1
 
 
(a) Includes new plant start-up costs of $1.4 million and $4.3 million for the three and nine months ended September 30, 2012, respectively. Includes rationalization charges of $1.7 million for each of the three and nine months ended September 30, 2012 and rationalization charges of $1.4 million for the nine months ended September 30, 2011. Includes a charge for the resolution of a past product liability dispute of $3.3 million for the nine months ended September 30, 2011.
(b) Includes rationalization charges of $0.5 million and $0.3 million for the three months ended September 30, 2012 and 2011, respectively, and $2.6 million and $1.7 million for the nine months ended September 30, 2012 and 2011, respectively.
(c) Includes a rationalization credit and rationalization charges of $0.1 million and $0.3 million for the three months ended September 30, 2012 and 2011, respectively, and rationalization charges of $1.5 million and $1.7 million for the nine months ended September 30, 2012 and 2011, respectively.
(d) Includes costs attributable to announced acquisitions of $0.8 million and $1.5 million for the three and nine months ended September 30, 2012, respectively. Includes income of $25.2 million for the nine months ended September 30, 2011 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 nine months ended September 30,

(Dollars in millions)

           

2012

         

2011

 
Cash flows provided by (used in) operating activities:
Net income $ 122.0 $ 156.1
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 125.2 120.9
Rationalization charges 5.8 4.8
Loss on early extinguishment of debt 38.7 1.0
Other changes that provided (used) cash, net of
effects from acquisitions:
Trade accounts receivable, net (239.2 ) (286.7 )
Inventories 10.8 (47.2 )
Trade accounts payable and other changes, net 6.7 127.3
Contributions to domestic pension benefit plans   (76.0 )   -  
Net cash (used in) provided by operating activities   (6.0 )   76.2  
 
Cash flows provided by (used in) investing activities:
Purchases of businesses, net of cash acquired (317.5 ) (289.4 )
Capital expenditures (84.7 ) (123.2 )
Proceeds from asset sales   1.4     3.4  
Net cash used in investing activities   (400.8 )   (409.2 )
 
Cash flows provided by (used in) financing activities:
Dividends paid on common stock (25.4 ) (23.4 )
Changes in outstanding checks – principally vendors (66.2 ) (92.9 )
Shares repurchased under authorized repurchase program (33.9 ) (15.8 )
Net borrowings and other financing activities   557.7     430.4  
Net cash provided by financing activities   432.2     298.3  
 
Cash and cash equivalents:
Net increase (decrease) 25.4 (34.7 )
Balance at beginning of year   397.1     175.2  
Balance at end of period $ 422.5   $ 140.5  
 
 

SILGAN HOLDINGS INC.

RECONCILIATION OF ADJUSTED NET INCOME PER DILUTED SHARE (1) (UNAUDITED)

For the quarter and nine months ended September 30,

 

Table A

       

Third Quarter

     

Nine Months

2012

     

2011

2012

     

2011

 
Net income per diluted share as reported $ 1.13 $ 1.12 $ 1.74 $ 2.22
 
Adjustments:
Rationalization charges 0.02 0.01 0.05 0.04
New plant start-up costs 0.01 - 0.04 -
Proceeds from termination of merger agreement - - - (0.37 )
Costs attributable to announced acquisitions 0.01 - 0.02 0.14
Loss on early extinguishment of debt - 0.01 0.37 0.01
Resolution of product liability dispute   -   -   -   0.03  
Adjusted net income per diluted share $ 1.17 $ 1.14 $ 2.22 $ 2.07  
 
 

SILGAN HOLDINGS INC.

RECONCILIATION OF ADJUSTED NET INCOME PER DILUTED SHARE (1)

(UNAUDITED)

For the quarter and year ended,

 

Table B

 

Fourth Quarter

     

Year Ended

December 31,

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 $ 0.50 $ 0.55 $

0.53

$ 2.24 $ 2.29 $ 2.75
 
Adjustments:
Rationalization charges 0.06 0.06

0.03

0.11 0.11 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) - - - 0.02 0.02 0.14
Loss on early extinguishment of debt - - - 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

$

0.58

$

0.63

$

0.56

$

2.80

$

2.85

$

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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