Silgan Holdings Inc. (Nasdaq:SLGN), a leading supplier of rigid packaging for shelf-stable food and other consumer goods products, today reported full year 2012 net income of $151.3 million, or $2.17 per diluted share, as compared to full year 2011 net income of $193.2 million, or $2.75 per diluted share. Adjusted net income per diluted share was $2.70 for the full year 2012, after adjustments increasing net income per diluted share by $0.53. Adjusted net income per diluted share was $2.63 for the full year 2011, after a net adjustment reducing net income per diluted share by $0.12. A reconciliation of net income per diluted share to “adjusted net income per diluted share,” a Non-GAAP financial measure used by the Company, which adjusts net income per diluted share for certain items, can be found in Tables A and B at the back of this press release.
The Company delivered net cash provided by operating activities of $351.7 million in 2012 and free cash flow of $303.7 million in 2012 as compared to free cash flow of $152.9 million in 2011. Free cash flow in 2012 benefited from a reduction in inventory of $56.8 million, other working capital improvements and a planned decrease in capital expenditures. The Company is providing a reconciliation in Table C of this press release of net cash provided by operating activities to “free cash flow,” a Non-GAAP financial measure, which adjusts net cash provided by operating activities for capital expenditures, voluntary contributions to domestic pension benefit plans and changes in outstanding checks.
“While 2012 was not without its challenges, we are pleased to have successfully delivered another year of record adjusted net income per diluted share of $2.70 and record free cash flow per diluted share of $4.35, a free cash flow yield of over 10 percent,” said Tony Allott, President and CEO. “As we entered 2012, we indicated that driving strong cash flow was going to be one of our priorities, and our businesses successfully responded by improving working capital metrics across the board. More importantly, we implemented a series of strategic initiatives to enhance each of our business franchises and position them for further profit and cash flow improvements,” continued Mr. Allott. “Our metal container business did deviate from its historic steady profit growth, but this was largely due to the impact of significant working capital reductions, logistical challenges with customer demand and European market weakness. Additionally, we began funding two major initiatives in our food can operations in 2012. The first program, “Can Vision 2020,” is designed to dramatically reduce system costs of canned foods to the store shelf. The second program represents an industry-wide campaign through the Can Manufacturers Institute to communicate the significant and sustainable benefits of canned foods to our customers, retailers and consumers. As a result of the temporary nature of these cost challenges, successes in increasing can volumes in 2012 and the clear and growing competitive advantage of the metal food can, we remain confident in the ongoing strength of this business. In addition, we are pleased with the operational improvement in plastic containers and the overall performance of the closures business in 2012,” continued Mr. Allott. “In 2013, we anticipate making further investments in strategic activities, continuing to drive reductions in working capital and completing our tender offer, all of which are expected to deliver full year adjusted earnings per diluted share in a range of $3.05 to $3.20, an increase of 13 percent to 19 percent,” concluded Mr. Allott.
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