Hagge continued, “Throughout the year we’ve been facing a challenging exchange rate environment. We estimate that on a year-to-date basis, changes in exchange rates have negatively impacted sales by approximately 6% with essentially the same impact on our earnings. Aptar Stelmi’s third quarter results contributed approximately 1% to our sales growth in the first nine months but negatively impacted earnings because of the required acquisition accounting adjustments.”
Reported diluted earnings per share, which included a negative impact of $0.08 per share related to the Aptar Stelmi acquisition ($0.06 per share from acquisition costs and $0.02 per share from the third quarter Aptar Stelmi results that reflected the acquisition accounting adjustments), decreased 11% to $1.86 per share compared to $2.08 per share a year ago. If the 2012 exchange rates were in place in 2011, AptarGroup estimates that the earnings per share for the first nine months of 2011 would have been approximately $1.95 per share. Prior year earnings per share also reflect a positive impact of $0.04 per share from a lower effective tax rate.
STELMI ACQUISITION UPDATE
Hagge commented on the recent acquisition, “We are extremely pleased with the progress of the Aptar Stelmi integration and the efforts of the combined team to make sure the business continues to grow uninterrupted. Customer feedback has been very positive and demand for Aptar Stelmi’s products has been strong in 2012. Volumes are up 9% in the third quarter compared to the prior year. We continue to expect the Aptar Stelmi business to be accretive annually between $0.12 and $0.16 per share beginning in the fourth quarter.”EUROPEAN OPERATIONS OPTIMIZATION PLAN AptarGroup today announced a plan to optimize certain capacity in Europe. Due to increased production efficiencies and to better position the Company for future growth in Europe, AptarGroup will transfer and consolidate production capacity involving twelve facilities. Two of the related facilities are expected to close and this would impact approximately 170 employees. The locations involved in the operations optimization plan are facilities that are serving the beauty, personal care, food, beverage, and consumer health care markets. The total costs associated with the plan are estimated to be approximately €14 million (approximately $18 million using current exchange rates) of which approximately €4 million (approximately $5 million using current exchange rates) relates to non-cash expenses. The charges will be recorded in the quarter in which they are recognized for accounting purposes. Annual savings are estimated to be approximately €9 million (approximately $12 million using current exchange rates) beginning in late 2013.