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AptarGroup Reports Third Quarter Results; Announces European Operations Optimization Plan

Commenting on the operations optimization plan, Hagge stated, “These actions are part of our long-term strategy intended to prepare us for future growth. We are benefiting from our continual investment in efficient production equipment and our ability to adapt to the changing needs of the markets we serve. In this instance, we looked at product lines, supply chains, and production capacity. We identified ways to streamline certain product technologies, reduce complexity for our people and our customers, and optimize our production footprint. This allows for a more efficient deployment of capital to support our growth in Europe.”

OUTLOOK

Regarding the Company’s outlook, Hagge stated, “We continue to be encouraged by the level of new project dialogue we are having with our customers. We are also optimistic that our market-focused approach will yield new applications for our innovative dispensing technologies. Nevertheless, we expect further challenges in the fourth quarter, including continued currency exchange rate headwinds, ongoing softness in certain markets driven by economic uncertainties, and decreased demand for our prescription nasal spray pumps, mainly due to the generic allergy market having a high level of inventory at this time. It appears that the inventory management issue affecting our prescription nasal spray pumps is isolated to the fourth quarter.”

Hagge continued, “Our fourth quarter earnings per share guidance does not include any potential impact from our European operations optimization plan. Currently, we anticipate earnings per share for the fourth quarter, including approximately $0.03 per share from the results of Aptar Stelmi, to be in the range of $0.53 to $0.58 compared to $0.57 per share a year ago. Had today’s currency exchange rates been in place a year ago, we estimate that the prior year’s fourth quarter earnings per share would have been approximately $0.54 per share.”

OPEN CONFERENCE CALL

There will be a conference call on Friday, November 2, 2012 at 8:00 a.m. CDT to discuss the Company’s third quarter results for 2012. The call will last approximately one hour. Interested parties are invited to listen to a live webcast by visiting the Investor Relations page at www.aptar.com. Replay of the conference call can also be accessed on the Investor Relations page of the web site.

AptarGroup, Inc. is a leading global supplier of a broad range of innovative dispensing systems for the beauty, personal care, pharmaceutical, home care, food, and beverage markets. AptarGroup is headquartered in Crystal Lake, Illinois, with manufacturing facilities in North America, Europe, Asia and South America. For more information, visit www.aptar.com.

This press release contains forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are based on management’s beliefs as well as assumptions made by and information currently available to management. Accordingly, AptarGroup’s actual results may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist including, but not limited to, economic, environmental or political conditions in the various markets and countries in which AptarGroup operates, changes in customer and/or consumer spending levels including the recent slowdown in Europe; financial conditions of customers and suppliers; fluctuations in the cost of raw materials, components and other input costs; the Company’s ability to increase prices, contain costs and improve productivity; our ability to successfully integrate the Stelmi acquisition; the timing and successful completion of our European operations optimization plan; changes in capital availability or cost, including interest rate fluctuations; the competitive marketplace; fiscal and monetary policy; changes in foreign currency exchange rates; direct or indirect consequences of acts of war or terrorism; and labor relations. For additional information on these and other risks and uncertainties, please see AptarGroup’s filings with the Securities and Exchange Commission, including its Form 10-K’s and Form 10-Q’s. Readers are cautioned not to place undue reliance on forward-looking statements . AptarGroup undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
         
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
 
(In Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF INCOME
 
Three Months Ended Nine Months Ended
September 30,     September 30,

2012

2011

2012

2011
 
Net Sales $ 589,598 $ 601,196 $ 1,759,599 $ 1,792,643
Cost of Sales (exclusive of depreciation
shown below) 407,368 406,768 1,198,663 1,198,919
Selling, Research & Development and
Administrative 80,094 86,716 256,218 267,485
Depreciation and Other Amortization   35,248     33,505     100,399     102,024  
Operating Income 66,888 74,207 204,319 224,215
Other Income/(Expense):
Interest Expense (4,721 ) (4,141 ) (13,867 ) (13,368 )
Interest Income 335 1,626 2,157 4,722
Equity in income of affiliates (229 ) 126 (518 ) 126
Miscellaneous, net   753     (580 )   (247 )   (1,286 )
Income before Income Taxes 63,026 71,238 191,844 214,409
Provision for Income Taxes   20,925     21,995     64,278     69,411  
Net Income $ 42,101 $ 49,243 $ 127,566 $ 144,998
 
Net Loss Attributable to Noncontrolling Interests   26     54     56     65  
 
Net Income Attributable to AptarGroup, Inc. $ 42,127   $ 49,297   $ 127,622   $ 145,063  
 
Net Income Attributable to AptarGroup, Inc. Per Common Share:
Basic $ 0.63   $ 0.74   $ 1.92   $ 2.17  
Diluted $ 0.62   $ 0.72   $ 1.86   $ 2.08  
 
Average Numbers of Shares Outstanding:
Basic 66,541 66,381 66,439 66,747
Diluted 68,353 68,677 68,711 69,616

   
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
CONSOLIDATED BALANCE SHEETS
 
September 30, 2012 December 31, 2011
ASSETS
 
Cash and Equivalents $ 174,287 $ 377,616
Receivables, net 422,514 389,020
Inventories 310,496 285,155
Other Current Assets   91,309   92,159
Total Current Assets 998,606 1,143,950
Net Property, Plant and Equipment 827,741 754,715
Goodwill, net 344,639 233,689
Other Assets   86,336   26,941
Total Assets $ 2,257,322 $ 2,159,295
 
LIABILITIES AND EQUITY
 
Short-Term Obligations $ 18,746 $ 183,668
Accounts Payable and Accrued Liabilities   361,861   335,181
Total Current Liabilities 380,607 518,849
Long-Term Obligations 379,110 254,910
Deferred Liabilities   119,319   94,964
Total Liabilities 879,036 868,723
 
AptarGroup, Inc. Stockholders' Equity 1,377,546 1,289,776
Noncontrolling Interests in Subsidiaries   740   796
Total Equity   1,378,286   1,290,572
 
Total Liabilities and Equity $ 2,257,322 $ 2,159,295

         
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
SEGMENT INFORMATION
 
Three Months Ended Nine Months Ended
September 30,     September 30,
 

2012

2011

2012

2011

NET SALES

 
Beauty + Home $ 358,476 $ 387,501 $ 1,104,911 $ 1,166,501
Pharma 156,100 146,445 429,122 417,152
Food + Beverage   75,022     67,250     225,566     208,990  
Total Net Sales $ 589,598   $ 601,196   $ 1,759,599   $ 1,792,643  
 

SEGMENT INCOME (1)
Beauty + Home $ 30,050 $ 32,025 $ 96,674 $ 104,555
Pharma (2) 34,194 44,801 104,676 124,058
Food + Beverage 9,611 6,891 24,252 23,076
Corporate and Other   (6,443 )   (9,964 )   (22,048 )   (28,634 )
Total Income Before Interest and Taxes $ 67,412 $ 73,753 $ 203,554 $ 223,055
Interest Expense, Net   (4,386 )   (2,515 )   (11,710 )   (8,646 )
Income before Income Taxes $ 63,026   $ 71,238   $ 191,844   $ 214,409  
 

SEGMENT INCOME AS % OF NET SALES
Beauty + Home 8.4 % 8.3 % 8.7 % 9.0 %
Pharma (2) 21.9 % 30.6 % 24.4 % 29.7 %
Food + Beverage 12.8 % 10.2 % 10.8 % 11.0 %
 
Notes to Condensed Consolidated Financial Statements:
(1) - The Company evaluates performance of its business units and allocates resources based upon segment income defined as earnings before net interest expense, certain corporate expenses, and income taxes.
 
(2) - Pharma segment income as a % of net sales would have been approximately 27.9% for both the third quarter and year-to-date 2012 if the effects of the Aptar Stelmi acquisition had been excluded.

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