Aptar Reports First Quarter 2024 Results
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Photo: Aptar
“We are off to a great start for the year. Strong sales growth in our Pharma business and continued margin expansion in our Beauty and Closures businesses helped us achieve double-digit earnings per share growth over the prior year quarter. Our Pharma segment continued to see healthy market demand and our proprietary drug delivery systems continued to show robust growth after growing more than 30% in the prior year quarter. Additionally,
First Quarter 2024 Highlights
- Reported sales grew 6% and core sales increased 5%
-
Double-digit increases in earnings per share, net income and adjusted EBITDA
-
Reported earnings per share increased 50% to
$1.23 and adjusted earnings per share increased 31% to$1.26 -
Reported net income increased 52% to
$83 million and adjusted EBITDA increased 16% to$179 million - Lower tax rate due to favorable mix of earnings and benefits from share-based compensation
-
Reported earnings per share increased 50% to
- Pharma segment delivered reported sales growth of 14% and core sales growth of 13% with continued demand for proprietary drug delivery systems
- Margins for Beauty and Closures segments continued to improve over prior year quarter, driven by improved operational performance and cost management efforts
First Quarter Results
For the quarter ended
First Quarter Segment Sales Analysis
|
||||
|
Aptar
|
Aptar
|
Aptar
|
Total
|
Reported Sales Growth |
14% |
0% |
2% |
6% |
Currency Effects (1) |
(1%) |
(1%) |
0% |
(1%) |
Acquisitions |
0% |
0% |
(1%) |
0% |
Core Sales Growth |
13% |
(1%) |
1% |
5% |
(1) - Currency effects are approximated by translating last year's amounts at this year's foreign exchange rates. |
Aptar Pharma had an increase in reported sales of 14% and cores sales of 13% over the prior year quarter. The segment’s strong performance was driven by continued growth for proprietary drug delivery systems used for emergency medicine, allergic rhinitis, asthma, and central nervous system therapeutics, as well as nasal saline rinses and nasal decongestants. As a reminder, core sales for proprietary drug delivery systems are expected to be within the 7-11% long-term target range for the year, after exceptionally strong double-digit growth in 2023. Sales improved for the Injectables division, rebounding from the Enterprise Resource Planning (ERP) implementation headwind that impacted the first quarter results of 2023. Strong demand for elastomeric components used for biologics continued to grow in the quarter.
Aptar Beauty’s reported sales were flat compared to the prior year quarter, and with currency effects core sales were down slightly. The segment’s core sales faced difficult comparisons — coming off 9% core sales growth in the prior year quarter. While volumes increased modestly, pricing and resin pass throughs negatively impacted the quarter. Sales for fragrance dispensing solutions increased slightly, as market demand began to normalize. In
Aptar Closures’ reported sales increased 2% over the prior year quarter and the segment’s core sales increased 1%, which does not include contributions from acquisitions and normalizes currency effects. In
Aptar reported first quarter earnings per share of
Outlook
Regarding Aptar’s outlook, Tanda stated, “The year is off to a great start and we will continue to build on our momentum in the second quarter. We anticipate demand for our proprietary drug delivery systems and elastomeric components for biologics to continue to grow in the second quarter, and we expect Pharma’s strong performance to continue throughout the year. We also expect demand to build for our consumer dispensing technologies in the second quarter as the destocking abates in
Aptar currently expects earnings per share for the second quarter of 2024, excluding any restructuring expenses, changes in the fair value of equity investments and acquisition costs, to be in the range of
Cash Dividends and Share Repurchases
As previously announced, Aptar’s Board of Directors approved a quarterly cash dividend of
Open Conference Call
There will be a conference call held on
About Aptar
Aptar is a global leader in drug and consumer product dosing, dispensing and protection technologies. Aptar serves a number of attractive end markets including pharmaceutical, beauty, food, beverage, personal care and home care. Using market expertise, proprietary design, engineering and science to create innovative solutions for many of the world’s leading brands, Aptar in turn makes a meaningful difference in the lives, looks, health and homes of millions of patients and consumers around the world. Aptar is headquartered in
Presentation of Non-GAAP Information
This press release refers to certain non-GAAP financial measures, including current year adjusted earnings per share and adjusted EBITDA, which exclude the impact of restructuring initiatives, acquisition-related costs, certain purchase accounting adjustments related to acquisitions and investments and net unrealized investment gains and losses related to observable market price changes on equity securities. Core sales and adjusted earnings per share also neutralize the impact of foreign currency translation effects when comparing current results to the prior year. Non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures provided by other companies. Aptar’s management believes these non-GAAP financial measures provide useful information to our investors because they allow for a better period over period comparison of operating results by removing the impact of items that, in management’s view, do not reflect Aptar’s core operating performance. These non-GAAP financial measures also provide investors with certain information used by Aptar’s management when making financial and operational decisions. Free cash flow is calculated as cash provided by operating activities less capital expenditures plus proceeds from government grants related to capital expenditures. We use free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. We believe that it is meaningful to investors in evaluating our financial performance and measuring our ability to generate cash internally to fund our initiatives. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial results but should be read in conjunction with the unaudited condensed consolidated statements of income and other information presented herein. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in the accompanying tables. Our outlook is provided on a non-GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled, such as exchange rates and changes in the fair value of equity investments, or reliably predicted because they are not part of the company's routine activities, such as restructuring and acquisition costs.
This press release contains forward-looking statements, including certain statements set forth under the “Outlook” section of this press release. Words such as “expects,” “anticipates,” “believes,” “estimates,” “future,” “potential,” “continues” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such 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 our beliefs as well as assumptions made by and information currently available to us. Accordingly, our actual results or other events may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in our operations and business environment including, but not limited to: geopolitical conflicts worldwide including the invasion of
Condensed Consolidated Financial Statements (Unaudited) (In Thousands, Except Per Share Data) Consolidated Statements of Income |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
||||
|
$ |
915,448 |
|
|
$ |
860,067 |
|
Cost of Sales (exclusive of depreciation and amortization shown below) |
|
582,756 |
|
|
|
557,422 |
|
Selling, Research & Development and Administrative |
|
152,780 |
|
|
|
147,923 |
|
Depreciation and Amortization |
|
64,349 |
|
|
|
59,259 |
|
Restructuring Initiatives |
|
3,480 |
|
|
|
11,524 |
|
Operating Income |
|
112,083 |
|
|
|
83,939 |
|
Other Income (Expense): |
|
|
|
||||
Interest Expense |
|
(10,175 |
) |
|
|
(10,228 |
) |
Interest Income |
|
2,898 |
|
|
|
672 |
|
Net Investment Gain |
|
592 |
|
|
|
188 |
|
Equity in Results of Affiliates |
|
(221 |
) |
|
|
(131 |
) |
Miscellaneous Expense, net |
|
(859 |
) |
|
|
(1,171 |
) |
Income before Income Taxes |
|
104,318 |
|
|
|
73,269 |
|
Provision for Income Taxes |
|
21,385 |
|
|
|
18,683 |
|
Net Income |
$ |
82,933 |
|
|
$ |
54,586 |
|
Net Loss Attributable to Noncontrolling Interests |
|
171 |
|
|
|
178 |
|
Net Income Attributable to |
$ |
83,104 |
|
|
$ |
54,764 |
|
Net Income Attributable to |
|
|
|
||||
Basic |
$ |
1.26 |
|
|
$ |
0.84 |
|
Diluted |
$ |
1.23 |
|
|
$ |
0.82 |
|
|
|
|
|
||||
Average Numbers of Shares Outstanding: |
|
|
|
||||
Basic |
|
66,064 |
|
|
|
65,372 |
|
Diluted |
|
67,432 |
|
|
|
66,735 |
|
Condensed Consolidated Financial Statements (Unaudited) (continued) ($ In Thousands) Consolidated Balance Sheets |
|||||
|
|
|
|
||
ASSETS |
|
|
|
||
|
|
|
|
||
Cash and Equivalents |
$ |
199,834 |
|
$ |
223,643 |
Short-term Investments |
|
1,223 |
|
|
— |
Accounts and Notes Receivable, Net |
|
724,015 |
|
|
677,822 |
Inventories |
|
496,840 |
|
|
513,053 |
Prepaid and Other |
|
138,097 |
|
|
134,761 |
Total Current Assets |
|
1,560,009 |
|
|
1,549,279 |
Property, Plant and Equipment, Net |
|
1,464,396 |
|
|
1,478,063 |
|
|
953,255 |
|
|
963,418 |
Other Assets |
|
459,426 |
|
|
461,130 |
Total Assets |
$ |
4,437,086 |
|
$ |
4,451,890 |
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||
|
|
|
|
||
Short-Term Obligations |
$ |
435,359 |
|
$ |
458,220 |
Accounts Payable, Accrued and Other Liabilities |
|
760,779 |
|
|
793,089 |
Total Current Liabilities |
|
1,196,138 |
|
|
1,251,309 |
Long-Term Obligations |
|
680,358 |
|
|
681,188 |
Deferred Liabilities and Other |
|
197,657 |
|
|
198,095 |
Total Liabilities |
|
2,074,153 |
|
|
2,130,592 |
|
|
|
|
||
|
|
2,348,859 |
|
|
2,306,824 |
Noncontrolling Interests in Subsidiaries |
|
14,074 |
|
|
14,474 |
Total Stockholders' Equity |
|
2,362,933 |
|
|
2,321,298 |
|
|
|
|
||
Total Liabilities and Stockholders' Equity |
$ |
4,437,086 |
|
$ |
4,451,890 |
Reconciliation of Adjusted EBIT and Adjusted EBITDA to Net Income (Unaudited) ($ In Thousands) |
||||||||||||||||||||||||
|
Three Months Ended
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
Consolidated |
|
|
Aptar Pharma |
|
Aptar Beauty |
|
Aptar Closures |
|
Corporate & Other |
|
Net Interest |
||||||||||||
|
$ |
915,448 |
|
|
|
$ |
407,293 |
|
|
$ |
327,320 |
|
|
$ |
180,835 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported net income |
$ |
82,933 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported income taxes |
|
21,385 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported income before income taxes |
|
104,318 |
|
|
|
|
103,352 |
|
|
|
17,196 |
|
|
|
12,870 |
|
|
|
(21,823 |
) |
|
|
(7,277 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring initiatives |
|
3,480 |
|
|
|
|
24 |
|
|
|
2,710 |
|
|
|
760 |
|
|
|
(14 |
) |
|
|
||
Net investment gain |
|
(592 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(592 |
) |
|
|
||
Adjusted earnings before income taxes |
|
107,206 |
|
|
|
|
103,376 |
|
|
|
19,906 |
|
|
|
13,630 |
|
|
|
(22,429 |
) |
|
|
(7,277 |
) |
Interest expense |
|
10,175 |
|
|
|
|
|
|
|
|
|
|
|
|
10,175 |
|
||||||||
Interest income |
|
(2,898 |
) |
|
|
|
|
|
|
|
|
|
|
|
(2,898 |
) |
||||||||
Adjusted earnings before net interest and taxes (Adjusted EBIT) |
|
114,483 |
|
|
|
|
103,376 |
|
|
|
19,906 |
|
|
|
13,630 |
|
|
|
(22,429 |
) |
|
|
— |
|
Depreciation and amortization |
|
64,349 |
|
|
|
|
28,802 |
|
|
|
21,228 |
|
|
|
13,531 |
|
|
|
788 |
|
|
|
||
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) |
$ |
178,832 |
|
|
|
$ |
132,178 |
|
|
$ |
41,134 |
|
|
$ |
27,161 |
|
|
$ |
(21,641 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported net income margins (Reported net income / Reported |
|
9.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA margins (Adjusted EBITDA / Reported |
|
19.5 |
% |
|
|
|
32.5 |
% |
|
|
12.6 |
% |
|
|
15.0 |
% |
|
|
|
|
|
Three Months Ended
|
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
Consolidated |
|
|
Aptar Pharma |
|
Aptar Beauty |
|
Aptar Closures |
|
Corporate & Other |
|
Net Interest |
||||||||||||
|
$ |
860,067 |
|
|
|
$ |
356,046 |
|
|
$ |
326,389 |
|
|
$ |
177,632 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported net income |
$ |
54,586 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported income taxes |
|
18,683 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reported income before income taxes |
|
73,269 |
|
|
|
|
82,390 |
|
|
|
7,432 |
|
|
|
13,295 |
|
|
|
(20,292 |
) |
|
|
(9,556 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring initiatives |
|
11,524 |
|
|
|
|
1,131 |
|
|
|
9,291 |
|
|
|
522 |
|
|
|
580 |
|
|
|
||
Net investment gain |
|
(188 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(188 |
) |
|
|
||
Transaction costs related to acquisitions |
|
255 |
|
|
|
|
— |
|
|
|
199 |
|
|
|
56 |
|
|
|
— |
|
|
|
||
Adjusted earnings before income taxes |
|
84,860 |
|
|
|
|
83,521 |
|
|
|
16,922 |
|
|
|
13,873 |
|
|
|
(19,900 |
) |
|
|
(9,556 |
) |
Interest expense |
|
10,228 |
|
|
|
|
|
|
|
|
|
|
|
|
10,228 |
|
||||||||
Interest income |
|
(672 |
) |
|
|
|
|
|
|
|
|
|
|
|
(672 |
) |
||||||||
Adjusted earnings before net interest and taxes (Adjusted EBIT) |
|
94,416 |
|
|
|
|
83,521 |
|
|
|
16,922 |
|
|
|
13,873 |
|
|
|
(19,900 |
) |
|
|
— |
|
Depreciation and amortization |
|
59,259 |
|
|
|
|
25,777 |
|
|
|
20,283 |
|
|
|
12,135 |
|
|
|
1,064 |
|
|
|
— |
|
Adjusted earnings before net interest, taxes, depreciation and amortization (Adjusted EBITDA) |
$ |
153,675 |
|
|
|
$ |
109,298 |
|
|
$ |
37,205 |
|
|
$ |
26,008 |
|
|
$ |
(18,836 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reported net income margins (Reported net income / Reported |
|
6.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA margins (Adjusted EBITDA / Reported |
|
17.9 |
% |
|
|
|
30.7 |
% |
|
|
11.4 |
% |
|
|
14.6 |
% |
|
|
|
|
Reconciliation of Adjusted Earnings Per Diluted Share (Unaudited) (In Thousands, Except Per Share Data) |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
||||
Income before Income Taxes |
$ |
104,318 |
|
|
$ |
73,269 |
|
|
|
|
|
||||
Adjustments: |
|
|
|
||||
Restructuring initiatives |
|
3,480 |
|
|
|
11,524 |
|
Net investment gain |
|
(592 |
) |
|
|
(188 |
) |
Transaction costs related to acquisitions |
|
— |
|
|
|
255 |
|
Foreign currency effects (1) |
|
|
|
1,237 |
|
||
Adjusted Earnings before Income Taxes |
$ |
107,206 |
|
|
$ |
86,097 |
|
|
|
|
|
||||
Provision for Income Taxes |
$ |
21,385 |
|
|
$ |
18,683 |
|
|
|
|
|
||||
Adjustments: |
|
|
|
||||
Restructuring initiatives |
|
891 |
|
|
|
3,065 |
|
Net investment gain |
|
(145 |
) |
|
|
(46 |
) |
Transaction costs related to acquisitions |
|
— |
|
|
|
65 |
|
Foreign currency effects (1) |
|
|
|
315 |
|
||
Adjusted Provision for Income Taxes |
$ |
22,131 |
|
|
$ |
22,082 |
|
|
|
|
|
||||
Net (Income) Loss Attributable to Noncontrolling Interests |
$ |
171 |
|
|
$ |
178 |
|
|
|
|
|
||||
Net Income Attributable to |
$ |
83,104 |
|
|
$ |
54,764 |
|
|
|
|
|
||||
Adjustments: |
|
|
|
||||
Restructuring initiatives |
|
2,589 |
|
|
|
8,459 |
|
Net investment gain |
|
(447 |
) |
|
|
(142 |
) |
Transaction costs related to acquisitions |
|
— |
|
|
|
190 |
|
Foreign currency effects (1) |
|
|
|
922 |
|
||
Adjusted Net Income Attributable to |
$ |
85,246 |
|
|
$ |
64,193 |
|
|
|
|
|
||||
Average Number of Diluted Shares Outstanding |
|
67,432 |
|
|
|
66,735 |
|
|
|
|
|
||||
Net Income Attributable to |
$ |
1.23 |
|
|
$ |
0.82 |
|
|
|
|
|
||||
Adjustments: |
|
|
|
||||
Restructuring initiatives |
|
0.04 |
|
|
|
0.13 |
|
Net investment gain |
|
(0.01 |
) |
|
|
— |
|
Transaction costs related to acquisitions |
|
— |
|
|
|
— |
|
Foreign currency effects (1) |
|
|
|
0.01 |
|
||
Adjusted Net Income Attributable to |
$ |
1.26 |
|
|
$ |
0.96 |
|
(1) Foreign currency effects are approximations of the adjustment necessary to state the prior year earnings and earnings per share using current period foreign currency exchange rates. |
Reconciliation of Free Cash Flow to Net Cash Provided by Operations (Unaudited) (In Thousands) |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
||||
Net Cash Provided by Operations |
$ |
92,333 |
|
|
$ |
98,304 |
|
Capital Expenditures |
|
(75,661 |
) |
|
|
(77,825 |
) |
Free Cash Flow |
$ |
16,672 |
|
|
$ |
20,479 |
|
Reconciliation of Adjusted Earnings Per Diluted Share (Unaudited) (In Thousands, Except Per Share Data) |
|||||
|
Three Months Ending
|
||||
|
Expected 2024 |
|
|
2023 |
|
|
|
|
|
||
Income before Income Taxes |
|
|
$ |
110,878 |
|
|
|
|
|
||
Adjustments: |
|
|
|
||
Restructuring initiatives |
|
|
|
1,943 |
|
Net investment gain |
|
|
|
(2,891 |
) |
Transaction costs related to acquisitions |
|
|
|
— |
|
Foreign currency effects (1) |
|
|
|
(905 |
) |
Adjusted Earnings before Income Taxes |
|
|
$ |
109,025 |
|
|
|
|
|
||
Provision for Income Taxes |
|
|
$ |
27,831 |
|
|
|
|
|
||
Adjustments: |
|
|
|
||
Restructuring initiatives |
|
|
|
494 |
|
Net investment gain |
|
|
|
(708 |
) |
Transaction costs related to acquisitions |
|
|
|
— |
|
Foreign currency effects (1) |
|
|
|
(227 |
) |
Adjusted Provision for Income Taxes |
|
|
$ |
27,390 |
|
|
|
|
|
||
Net Loss Attributable to Noncontrolling Interests |
|
|
$ |
25 |
|
|
|
|
|
||
Net Income Attributable to |
|
|
$ |
83,072 |
|
|
|
|
|
||
Adjustments: |
|
|
|
||
Restructuring initiatives |
|
|
|
1,449 |
|
Net investment gain |
|
|
|
(2,183 |
) |
Transaction costs related to acquisitions |
|
|
|
— |
|
Foreign currency effects (1) |
|
|
|
(678 |
) |
Adjusted Net Income Attributable to |
|
|
$ |
81,660 |
|
|
|
|
|
||
Average Number of Diluted Shares Outstanding |
|
|
|
66,855 |
|
|
|
|
|
||
Net Income Attributable to |
|
|
$ |
1.24 |
|
|
|
|
|
||
Adjustments: |
|
|
|
||
Restructuring initiatives |
|
|
|
0.02 |
|
Net investment gain |
|
|
|
(0.03 |
) |
Transaction costs related to acquisitions |
|
|
|
— |
|
Foreign currency effects (1) |
|
|
|
(0.01 |
) |
Adjusted Net Income Attributable to |
|
|
$ |
1.22 |
|
(1) Foreign currency effects are approximations of the adjustment necessary to state the prior year earnings and earnings per share using spot rates as of |
|||||
(2) AptarGroup’s expected earnings per share range for the second quarter of 2024, excluding any restructuring expenses, acquisition costs and changes in fair value of equity investments, is based on an effective tax rate range of 22% to 24%. This tax rate range compares to our second quarter of 2023 effective tax rate of 25% on both reported and adjusted earnings per share. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240425632804/en/
Investor Relations Contact:
mary.skafidas@aptar.com
815-479-5530
Media Contact:
katie.reardon@aptar.com
815-479-5671
Source: