AptarGroup Reports Increased Fourth Quarter and Record Annual Results; Announces Web Site Availability of Corporate Governance Information.Business Editors CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--Feb. 12, 2003 AptarGroup, Inc. (NYSE:ATR) today reported increased sales and earnings per share for the fourth quarter of 2002 and record results for the year. The Company also announced that key corporate governance documents are available on the Company's web site. FOURTH QUARTER RESULTS For the quarter ended December 31, 2002, sales increased 14 percent to $235.1 million from $205.7 million in the prior year. Core Sales (i.e., sales excluding changes in foreign currency exchange rates) increased approximately 9 percent from the prior year. Net income for the fourth quarter of 2002 increased to $18.1 million from $9.8 million a year ago. Diluted earnings per share were $.50 per share compared to $.27 per share in the prior year. The Company recorded the final charges related to its Strategic Initiative during the fourth quarter. These charges after taxes totaled $.2 million in the fourth quarter of 2002 compared to $.7 million in the prior year. Excluding these charges, net income increased to $18.2 million from $10.5 million. Diluted earnings per share excluding these charges increased to $.50 per share from $.29 per share in the prior year. The prior year amount includes approximately $.02 per share for goodwill amortization. ANNUAL RESULTS For the year ended December 31, 2002, sales increased 4 percent to a record $926.7 million from $892.0 million in the prior year. Core Sales increased approximately 2 percent from the prior year. Net income for the year 2002 increased to a record $66.6 million from $58.8 million a year ago. Diluted earnings per share were $1.82 per share compared to $1.61 per share in the prior year. The Company recorded after-tax charges totaling $3.8 million related to the Strategic Initiative and a patent dispute settlement in 2002 and $6.0 million related to the Strategic Initiative in 2001. Excluding these charges, net income increased to $70.4 million from $64.8 million in the prior year. Diluted earnings per share excluding these charges were $1.92 per share compared to $1.78 per share in the prior year. The prior year amount includes approximately $.09 per share recorded for goodwill amortization. MANAGEMENT COMMENT Commenting on the quarter, Carl A. Siebel, President and Chief Executive Officer, said, "Our sales and profits increased significantly over the depressed level in the fourth quarter of the prior year. Overall, we are pleased that our fourth quarter results were better than we had expected. Despite ongoing competitive price pressure, we recorded strong sales to the personal care, fragrance/cosmetic, food/beverage and household markets. This strength was partially offset by weaker sales to the pharmaceutical market which were strong in the fourth quarter of last year. "We experienced certain cost increases in areas such as insurance and pension expenses. However, we continue to see the benefits of our cost savings efforts across the Company such as those from our Strategic Initiative, better utilization of overhead and lower interest expense. All of these savings helped to propel our profits above the prior year level," Siebel added. "Looking at the year, while the results were not as strong as we had predicted at the beginning of the year, principally due to the delay in the recovery of the fragrance/cosmetic market, we are proud of our record annual results. In light of the difficult business environment, we continue to see the benefits of a diverse product and market portfolio, our broad geographic presence and management's diligent focus on cost containment." BUSINESS SEGMENT PERFORMANCE For the quarter, sales of the Dispensing Systems segment increased 14 percent, to $196.4 million from $172.2 million in the prior year. The increase is mainly due to increased sales to the fragrance/cosmetic, personal care and food/beverage markets which were partially offset by decreased sales to the pharmaceutical market. For the year, sales increased 3 percent to $766.8 million from $747.7 million in the prior year primarily due to increased sales to the pharmaceutical market, personal care and food/beverage markets which were partially offset by decreased sales to the fragrance/cosmetic market. Fourth quarter EBIT (earnings before interest and taxes) for the Dispensing Systems segment increased to $28.5 million from $24.4 million in the prior year on a comparable basis (after adjusting for the elimination of goodwill amortization in 2001). For the year, EBIT for the segment decreased to $114.5 million from $123.3 million in the prior year on a comparable basis. For the quarter, sales of the SeaquistPerfect segment increased 14 percent, to $41.3 million from $36.1 million in the prior year. The increase is primarily due to increased demand from the personal care market for aerosol valves, pumps and spray accessories. For the year, sales increased 10 percent to $170.3 million from $154.2 million in the prior year. Fourth quarter EBIT for the SeaquistPerfect segment increased to $1.8 million from $.1 million a year ago on a comparable basis primarily due to increased sales and continued cost savings. For the year, EBIT increased to $11.1 million from $6.0 million in the prior year on a comparable basis. OUTLOOK Siebel commented, "Looking forward to 2003, it is very difficult to predict how the year will progress, particularly in light of the precarious situation in the Middle East. We are uncertain as to how developments there may impact our customers and end consumers. Barring any significant negative impact from events there, we are cautiously optimistic about the year ahead. "The positive momentum in the personal care, fragrance/cosmetic and food/beverage markets that we saw in late 2002 is expected to continue into 2003. We anticipate that sales of our products to the pharmaceutical market in early 2003 will be lower than the level seen in early 2002. However, indications point to sales to this market improving as the year progresses." Siebel concluded, "Subject to developments in the Middle East, we anticipate diluted earnings per share for the first quarter of 2003 to be in the range of $.48 to $.53 per share compared to $.36 per share reported in 2002 (or $.44 per share excluding charges related to the Strategic Initiative and a patent dispute settlement)." CORPORATE GOVERNANCE AptarGroup today announced that it has made available key corporate governance information on its web site. In addition to the Company's corporate governance principles, its Code of Business Conduct and Ethics and committee charters of the Board of Directors can also be found on the site. "Effective communication with investors has always been a priority for us and we are proud of our governance history. We are very happy to share this governance information in a manner that is simple and easy to access," said Siebel. The information can be found on the Investor Relations page of the Company's web site, www.aptargroup.com. OPEN CONFERENCE CALL There will be a conference call on Thursday, February 13, 2003 at 8:00 a.m. CST to discuss the Company's fourth quarter and annual results for 2002. The call will last approximately one hour and feature remarks by Carl A. Siebel and Stephen J. Hagge, AptarGroup's Chief Financial Officer. Interested parties are invited to listen to a live webcast by visiting the Investor Relations page at www.aptargroup.com. Replay of the conference call can also be accessed on the Investor Relations page of the web site until 5:00 p.m. CST on March 12, 2003. AptarGroup, Inc. is a leading global supplier of a broad range of innovative dispensing systems for the fragrance/cosmetic, personal care, pharmaceutical, household and food/beverage markets. AptarGroup is headquartered in Crystal Lake, Illinois, with manufacturing facilities in North America, Europe, Asia and South America. For more information, visit the AptarGroup web site at www.aptargroup.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, the Company'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, those related to overall business conditions in the various markets in which the Company operates, fiscal and monetary policy, changes in foreign exchange rates, direct or indirect consequences of acts of war or terrorism and other risks and uncertainties discussed from time to time in the Company's filings with the Securities and Exchange Commission, including its Form 10-K's and 10-Q's. Readers are cautioned not to place undue reliance on forward-looking statements.
APTARGROUP, INC.
Condensed Consolidated Financial Statements
(Unaudited) (In Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED
--------------------------------------------------------
DECEMBER 31, 2002 DECEMBER 31, 2001
--------------------------------------------------------
Non- Excluding Non- Excluding
recurring Non- recurring Non-
Charges recurring Charges recurring
Reported (1) Charges Reported (1) Charges
--------------------------------------------------------
Net Sales $235,066 $235,066 $205,706 $205,706
Cost of Sales 151,214 10 151,204 133,322 70 133,252
Selling,
Research &
Development
and
Administrative 37,878 37,878 36,362 36,362
Goodwill
Amortization
(2) --- --- 925 925
Depreciation
and Other
Amortization 18,940 18,940 17,406 696 16,710
Strategic
Initiative
Costs:
Severance
and Other 234 234 --- 74 74 ---
--------------------------------------------------------
Operating
Income 26,800 (244) 27,044 17,617 (840) 18,457
Other:
Interest
Expense (2,335) (2,335) (3,168) (3,168)
Interest
Income 914 914 446 446
Equity in
Results of
Affiliates 254 254 (80) (80)
Minority
Interests 118 118 31 31
Miscellaneous,
net 90 90 630 630
--------------------------------------------------------
Income before
Income Taxes 25,841 (244) 26,085 15,476 (840) 16,316
Provision for
Income Taxes 7,786 (91) 7,877 5,666 (107) 5,773
--------------------------------------------------------
Net Income $18,055 $(153) $18,208 $9,810 $(733) $10,543
========================================================
Net Income per
Share - Basic $.50 $--- $.51 $.27 $(.02) $.29
========================================================
Net Income per
Share -
Diluted $.50 $--- $.50 $.27 $(.02) $.29
========================================================
Average Number
of Shares -
Basic 35,918 35,918 35,918 35,859 35,859 35,859
Average Number
of Shares -
Diluted 36,419 36,419 36,419 36,602 36,602 36,602
Notes to Condensed Consolidated Financial Statements:
(1) Nonrecurring charges in both years represent charges relating
to the Company's Strategic Initiative. Results excluding non-recurring
charges have been presented as management believes that excluding
these charges is a better reflection of normal on-going operating
results.
(2) Goodwill amortization ($881 after-tax or $.02 per share) was
recorded in 2001 prior to the 1/1/02 adoption of SFAS No. 142,
"Goodwill and Other Intangible Assets".
APTARGROUP, INC.
Condensed Consolidated Financial Statements
(Unaudited) (In Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED
-----------------------------------------------------------
DECEMBER 31, 2002 DECEMBER 31, 2001
-----------------------------------------------------------
Non- Excluding Non- Excluding
recurring Non- recurring Non-
Charges recurring Charges recurring
Reported (1) Charges Reported (1) Charges
---------------------------------------------------------
Net Sales $926,691 $926,691 $891,986 $891,986
Cost of Sales 593,723 305 593,418 562,814 170 562,644
Selling,
Research &
Development
and
Administrative 148,348 148,348 146,137 146,137
Goodwill
Amortization
(2) --- --- 3,646 3,646
Depreciation
and Other
Amortization 72,141 140 72,001 69,938 1,857 68,081
Strategic
Initiative
Costs:
Asset
Impairment --- --- --- 5,498 5,498 ---
Severance
and Other 1,238 1,238 --- 2,085 2,085 ---
Patent Dispute
Settlement 4,168 4,168 --- --- --- ---
--------------------------------------------------------
Operating
Income 107,073 (5,851) 112,924 101,868 (9,610) 111,478
Other:
Interest
Expense (10,695) (10,695) (15,572) (15,572)
Interest Income 2,083 2,083 1,822 1,822
Equity in
Results of
Affiliates 191 191 (248) (248)
Minority
Interests 167 167 (564) (564)
Miscellaneous,
net (461) (461) 1,049 1,049
--------------------------------------------------------
Income before
Income Taxes 98,358 (5,851) 104,209 88,355 (9,610) 97,965
Provision for
Income Taxes 31,711 (2,063) 33,774 29,447 (3,615) 33,062
--------------------------------------------------------
Net Income
Before
Cumulative
Effect of a
Change in
Accounting
Principle 66,647 (3,788) 70,435 58,908 (5,995) 64,903
Cumulative
Effect of a
Change in
Accounting
Principle, Net
of Tax (3) --- --- --- (64) --- (64)
-------------------------------------------------------
Net Income
After
Cumulative
Effect of a
Change in
Accounting
Principle (2) $66,647 $(3,788) $70,435 $58,844 $(5,995) $64,839
=======================================================
Net Income per
Share Before
Change in
Accounting
Principle -
Basic (2) $1.65 $(.17) $1.81
=============================
Net Income per
Share - Basic
(2) $1.86 $(.10) $1.96 $1.64 $(.17) $1.81
========================================================
Net Income per
Share -
Diluted (2,4) $1.82 $(.10) $1.92 $1.61 $(.16) $1.78
========================================================
Average Number
of Shares -
Basic 35,918 35,918 35,918 35,805 35,805 35,805
Average Number
of Shares -
Diluted 36,623 36,623 36,623 36,529 36,529 36,529
Notes to Condensed Consolidated Financial Statements:
(1) Nonrecurring charges represent charges relating to the
Company's Strategic Initiative and Patent Dispute Settlement in 2002
and charges relating to the Strategic Initiative in 2001. Results
excluding non-recurring charges have been presented as management
believes that excluding these charges is a better reflection of normal
on-going operating results.
(2) Goodwill amortization ($3,471 after-tax or $.09 per share) was
recorded in 2001 prior to the 1/1/02 adoption of SFAS No. 142,
"Goodwill and Other Intangible Assets".
(3) Represents the impact of the adoption of SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities'' on
January 1, 2001.
(4) Net Income Per Share-Diluted amounts for 2001 are the same
when calculated using either Net Income Before or After the Cumulative
Effect of a Change in Accounting Principle.
APTARGROUP, INC.
Condensed Consolidated Financial Statements
(Unaudited) (continued) (In Thousands)
CONSOLIDATED BALANCE SHEETS
December December
31, 2002 31, 2001
--------------------
ASSETS
Cash and Equivalents $90,205 $48,013
Receivables, net 197,881 185,131
Inventories 127,828 120,531
Other Current Assets 31,282 21,240
--------------------
Total Current Assets 447,196 374,915
Net Property, Plant and Equipment 434,817 381,102
Goodwill, net 128,930 122,569
Other Assets 36,728 36,741
--------------------
Total Assets $1,047,671 $915,327
====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-Term Obligations $-- $13,168
Accounts Payable and Accrued Liabilities 153,446 140,983
--------------------
Total Current Liabilities 153,446 154,151
Long-Term Obligations 230,852 239,387
Deferred Liabilities 68,906 52,585
--------------------
Total Liabilities 453,204 446,123
Stockholders' Equity 594,467 469,204
--------------------
Total Liabilities and Stockholders' Equity $1,047,671 $915,327
====================
APTARGROUP, INC.
Condensed Consolidated Financial Statements
(Unaudited) (continued) (In Thousands)
SEGMENT INFORMATION
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------- ------------------
2002 2001 2002 2001
----------------- ------------------
NET SALES
Dispensing Systems $196,350 $172,168 $766,768 $747,659
SeaquistPerfect 41,269 36,096 170,320 154,159
Intersegment Eliminations (2,553) (2,558) (10,397) (9,832)
----------------- ------------------
Total Net Sales $235,066 $205,706 $926,691 $891,986
================= ==================
EARNINGS (as reported)
Dispensing Systems $28,540 $23,478 $114,517 $119,761
SeaquistPerfect 1,827 58 11,069 5,843
Corporate Expenses and Other (2,861) (4,498) (12,765) (13,889)
Strategic Initiative Charges (1) (244) (840) (1,683) (9,610)
Patent Dispute Settlement (1) --- --- (4,168) ---
----------------- ------------------
Earnings before Interest and Taxes
(EBIT) 27,262 18,198 106,970 102,105
Less: Interest Expense, Net 1,421 2,722 8,612 13,750
----------------- ------------------
Income before Income Taxes $25,841 $15,476 $98,358 $88,355
================= ==================
SUPPLEMENTAL 2001 INFORMATION
Goodwill Amortization (2):
Dispensing Systems - $887 - $3,518
SeaquistPerfect - 35 - 116
Corporate and Other - 3 - 12
--------- ---------
Total Goodwill Amortization - $925 - $3,646
========= =========
Segment Earnings Excluding
Goodwill Amortization:
Dispensing Systems - $24,365 - $123,279
SeaquistPerfect - 93 - 5,959
Notes to Condensed Consolidated Financial Statements:
(1) Strategic Initiative Charges and the Patent Dispute Settlement
relate to the Dispensing Systems segment.
(2) Represents goodwill amortization recorded prior to the
adoption of SFAS No. 142, "Goodwill and Other Intangible Assets".
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