AptarGroup Reports Second Quarter Results; Declares Dividend.Business Editors CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--July 18, 2002 AptarGroup, Inc. (NYSE NYSE See: New York Stock Exchange :ATR ATR Achilles tendon reflex, see Ankle reflex ) today reported second quarter results that were in line with previous guidance. SECOND QUARTER RESULTS For the quarter ended June June: see month. 30, 2002, sales increased 1 percent to $233.2 million from $231.8 million in the prior year. Core Sales (i.e., sales excluding changes in foreign currency exchange rates) decreased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1 percent from the prior year. Net income for the second quarter of 2002 increased to $17.5 million from $15.2 million a year ago. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $.48 per share compared to $.41 per share in the prior year. The Company recorded charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its Strategic Initiative of $.8 million (after taxes) in the second quarter of 2002 versus $4.6 million in the prior year. Excluding these charges, net income decreased to $18.4 million from $19.8 million in the prior year. Diluted earnings per share excluding these charges decreased to $.50 per share from $.56 per share for the prior year period on a comparable basis (excluding approximately $.02 per share recorded in the second quarter of 2001 for goodwill amortization). SIX MONTHS RESULTS For the six months ended June 30, 2002, sales decreased 3 percent to $451.9 million from $464.7 million in the prior year. Core Sales decreased approximately 2 percent from the prior year. Net income for the first six months of 2002 decreased to $30.8 million from $33.3 million a year ago. Diluted earnings per share were $.84 per share compared to $.91 per share in the prior year. The Company recorded charges totaling $3.6 million (after taxes) related to the Strategic Initiative and a patent dispute settlement in 2002 and a charge of $4.6 million related to the Strategic Initiative in 2001. Excluding these charges, net income decreased to $34.4 million from $37.9 million in the prior year. Diluted earnings per share excluding these charges decreased to $.94 per share from $1.09 per share for the prior year period on a comparable basis (excluding approximately $.05 per share recorded in the first six months of 2001 for goodwill amortization). MANAGEMENT COMMENT Commenting on the quarter, Carl A. Siebel For the tech company, see . Siebel, originally Flugzeugbau Halle, was a German aircraft manufacturer in Halle an der Saale. Siebel aircraft included:
Siebel added, "Our results were negatively affected primarily by weak demand in the fragrance/cosmetic market, increased competition in the low-price fragrance/cosmetic and personal care markets and higher insurance costs. The adverse effect of these on our bottom line was mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. by lower interest expense and success from our cost savings efforts." BUSINESS SEGMENT PERFORMANCE For the quarter, sales of the Dispensing dispensing provision of drugs or medicines as set out properly on a lawful prescription. A prescription can only be filled, the drugs supplied, by a registered pharmacist, veterinarian, dentist or member of the medical profession. Systems segment declined 1 percent, to $192.9 million from $195.8 million in the prior year. The decline is mainly due to decreased sales to the fragrance/cosmetic market which was partially offset by increased sales to the pharmaceutical market. For the first six months, sales decreased 4 percent to $373.0 million from $389.0 million in the prior year. Second quarter EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). (earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1] EBIT = Operating Revenue – Operating Expenses + Non-operating Income ) for the Dispensing Systems segment decreased to $30.3 million from $35.6 million in the prior year on a comparable basis after adjusting for the elimination of goodwill amortization. For the first six months, EBIT for the segment decreased to $56.4 million from $68.0 million in the prior year on a comparable basis. For the quarter, sales of the SeaquistPerfect segment increased 12 percent, to $43.0 million from $38.3 million in the prior year. The increase is primarily due to increased demand from the personal care and household markets for aerosol aerosol (âr`əsōl,–sŏl): see colloid. aerosol System of tiny liquid or solid particles evenly distributed in a finely divided state through a gas, usually air. valves and spray (networking) spray - A Unix command that sends packets to a host and reports performance statistics. The number of packets, delay between packets and packet length can all be specified. accessories. For the first six months, sales increased 5 percent to $84.6 million from $80.3 million in the prior year. Second quarter EBIT for the SeaquistPerfect segment increased to $3.0 million from $1.7 million a year ago on a comparable basis primarily due to increased sales and continued cost savings. For the first six months, EBIT increased to $6.2 million from $4.3 million in the prior year on a comparable basis. OUTLOOK Siebel commented, "The anticipated recovery in the fragrance/cosmetic market has not yet materialized. As a result, sales to this market in the third quarter are expected to be less than the prior year. However, we continue to expect increased sales to the personal care, household and food/beverage markets over the prior year. Although the positive trend in the pharmaceutical market is projected to continue, the increase over the prior year's level is not expected to be as high as experienced during the first half of the year. "We anticipate Core Sales for the third quarter of 2002 to increase over the prior year's level. Also, diluted earnings per share are expected to be in the range of $.47 to $.52 per share versus $.47 per share in 2001 on a comparable basis (excluding Strategic Initiative charges of $.02 per share and goodwill amortization of $.02 per share). "Although fragrance/cosmetic customers continue to express optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. about the prospects for this market in the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , it is difficult to predict the timing of the recovery. Sales of our products to the other markets are forecasted to increase as earlier expected. However, in light of the uncertainty in the fragrance/cosmetic market, we are reducing our comparable earnings growth expectation for the full year of 2002 from double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. to low single-digit." Siebel concluded, "Looking longer term, we are well positioned from a cost standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the for the recovery in the fragrance/cosmetic market. In the personal care and food markets, use of our packaging systems to differentiate differentiate /dif·fer·en·ti·ate/ (dif?er-en´she-at) 1. to distinguish, on the basis of differences. 2. to develop specialized form, character, or function differing from that surrounding it or from the original. our customers' products is increasing. Also, the number of new projects in the pharmaceutical market continues to grow. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. challenges, we continue to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the Company's future." CASH DIVIDEND The Board of Directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly dividend of $.06 per share, payable August 20, 2002 to shareholders of record as of July July: see month. 30, 2002. OPEN CONFERENCE CALL There will be a conference call on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , July 19, 2002 at 8:00 a.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. to discuss the Company's second quarter for 2002. The call will last approximately one hour and feature remarks by Carl A. Siebel and Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and J. Hagge, AptarGroup's Chief Financial Officer. Interested parties are invited to listen to a live webcast by visiting the Investor Relations Investor relations The process by which the corporation communicates with its investors. 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 August 18, 2002. 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 Crystal Lake is a city located in southeastern McHenry County in northeastern Illinois. It is named after Crystal Lake, a 230 acre (1 km²) lake 1.6 miles (2.6 km) west-southwest of downtown. The population was 38,000 at the 2000 census. , with manufacturing facilities in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Asia and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . For more information,
visit the AptarGroup web site at http://www.aptargroup.com.
This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Forward-looking statements are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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, the ability to successfully execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution the Company's Strategic Initiative, changes in foreign exchange rates, direct or indirect consequences of acts of war Tom Clancy's Op-Center: Acts of War is a technothriller by Jeff Rovin Plot introduction The mobile Regional Operations Center (ROC) in Turkey investigates a dam blown up by Kurdish terrorists. or terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. 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
-----------------------------------
JUNE 30, 2002
-------------
Excluding
Non- Non-
recurring recurring
Reported Charges (1) Charges
--------- ----------- -------
Net Sales $233,154 $233,154
Cost of Sales 148,504 288 148,216
Selling, Research & Development and
Administrative 37,995 37,995
Goodwill Amortization (2) --- ---
Depreciation and Other Amortization 16,737 70 16,667
Strategic Initiative Costs:
Asset Impairment --- --- ---
Severance and Other 946 946 ---
--------- ---------- ----------
Operating Income 28,972 (1,304) 30,276
Other:
Interest Expense (2,776) (2,776)
Interest Income 358 358
Equity in Results of Affiliates (75) (75)
Minority Interests 48 48
Miscellaneous, net (425) (425)
--------- ---------- -----------
Income before Income Taxes 26,102 (1,304) 27,406
Provision for Income Taxes 8,563 (489) 9,052
--------- ---------- -----------
Net Income $ 17,539 $ (815) $ 18,354
========= ========== ===========
Net Income per Share - Basic $ .49 $ (.02) $ .51
========= ========== ===========
Net Income per Share - Diluted $ .48 $ (.02) $ .50
========= ========== ===========
Average Number of Shares - Basic 35,940 35,940 35,940
Average Number of Shares - Diluted 36,893 36,893 36,893
-----------------------------------
JUNE 30, 2001
-------------
Excluding
Non- Non-
recurring recurring
Reported Charges (1) Charges
--------- ----------- -----------
Net Sales $231,769 $231,769
Cost of Sales 143,662 143,662
Selling, Research & Development and
Administrative 37,297 37,297
Goodwill Amortization (2) 903 903
Depreciation and Other Amortization 17,003 464 16,539
Strategic Initiative Costs:
Asset Impairment 5,498 5,498 ---
Severance and Other 1,777 1,777 ---
----- ---------- -----------
Operating Income 25,629 (7,739) 33,368
Other:
Interest Expense (4,265) (4,265)
Interest Income 370 370
Equity in Results of Affiliates (74) (74)
Minority Interests (156) (156)
Miscellaneous, net 565 565
--------- ---------- -----------
Income before Income Taxes 22,069 (7,739) 29,808
Provision for Income Taxes 6,879 (3,096) 9,975
--------- ---------- -----------
Net Income $ 15,190 $ (4,643) $ 19,833
========= ========== ===========
Net Income per Share - Basic $ .42 $ (.13) $ .55
========= ========== ===========
Net Income per Share - Diluted $ .41 $ (.13) $ .54
========= ========== ===========
Average Number of Shares - Basic 35,795 35,795 35,795
Average Number of Shares - Diluted 36,649 36,649 36,649
Notes to Condensed Consolidated Financial Statements:
(1) Nonrecurring charges in both years represent charges relating to
the Company's Strategic Initiative.
(2) Goodwill amortization ($864 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
SIX MONTHS ENDED
-----------------------------------
JUNE 30, 2002
-------------
Excluding
Non- Non-
recurring recurring
Reported Charges (1) Charges
--------- ----------- -----------
Net Sales $451,861 $451,861
Cost of Sales 288,265 288 287,977
Selling, Research & Development and
Administrative 73,055 73,055
Goodwill Amortization (2) --- ---
Depreciation and Other Amortization 34,154 140 34,014
Strategic Initiative Costs:
Asset Impairment --- --- ---
Severance and Other 975 975 ---
Patent Dispute Settlement 4,168 4,168 ---
--------- ---------- -----------
Operating Income 51,244 (5,571) 56,815
Other:
Interest Expense (5,577) (5,577)
Interest Income 688 688
Equity in Results of Affiliates (186) (186)
Minority Interests 18 18
Miscellaneous, net (362) (362)
--------- --------- -----------
Income before Income Taxes 45,825 (5,571) 51,396
Provision for Income Taxes 15,011 (1,958) 16,969
--------- ---------- -----------
Net Income Before Cumulative Effect
of a Change in Accounting Principle 30,814 (3,613) 34,427
Cumulative Effect of a Change in
Accounting Principle,
Net of Tax (3) -- -- --
--------- ---------- ----------
Net Income After Cumulative Effect
of a Change in Accounting
Principle (2) $ 30,81 $ (3,613) $ 34,427
========= ========== ==========
Net Income per Share
- Basic (2,4) $ .86 $ (10) $ .96
========= ========== ==========
Net Income per Share
- Diluted (2,4) $ .84 $ (.10) $ .94
========= ========== ==========
Average Number of Shares - Basic 35,902 35,902 35,902
Average Number of Shares - Diluted 36,777 36,777 36,777
-----------------------------------
JUNE 30, 2001
-------------
Excluding
Non- Non-
recurring recurring
Reported Charges (1) Charges
--------- ----------- -----------
Net Sales $464,668 $464,668
Cost of Sales 290,009 290,009
Selling, Research & Development and
Administrative 73,878 73,878
Goodwill Amortization (2) 1,811 1,811
Depreciation and Other Amortization 34,792 464 34,328
Strategic Initiative Costs:
Asset Impairment 5,498 5,498 ---
Severance and Other 1,777 1,777 ---
Patent Dispute Settlement --- --- ---
--------- ---------- -----------
Operating Income 56,903 (7,739) 64,642
Other:
Interest Expense (8,899) (8,899)
Interest Income 1,041 1,041
Equity in Results of Affiliates (110) (110)
Minority Interests (396) (396)
Miscellaneous, net 817 817
--------- ---------- -----------
Income before Income Taxes 49,356 (7,739) 57,095
Provision for Income Taxes 15,992 (3,096) 19,088
--------- ---------- ---------
Net Income Before Cumulative Effect
of a Change in Accounting Principle 33,364 (4,643) 38,007
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) $ 33,30 $ (4,643) $ 37,943
========= ========== ==========
Net Income per Share
- Basic (2,4) $ .93 $ (.13) $1.06
========= ========== ===========
Net Income per Share
- Diluted (2,4) $ .91 $ (.13) $ 1.04
========= ========== ===========
Average Number of Shares - Basic 35,739 35,739 35,739
Average Number of Shares - Diluted 36,491 36,491 36,491
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.
(2) Goodwill amortization ($1,724 after-tax or $.05 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 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
June 30, 2002 December 31, 2001
------------- ------------------
ASSETS
Cash and Equivalents $ 62,864 $ 48,013
Receivables, net 208,480 185,131
Inventories 121,301 120,531
Other Current Assets 30,019 21,240
------------ ----------
Total Current Assets 422,664 374,915
Net Property, Plant and Equipment 413,520 381,102
Goodwill, net 126,497 122,569
Other Assets 40,728 36,741
------------ ----------
Total Assets $1,003,409 $915,327
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-Term Obligations $ 6,066 $ 13,168
Accounts Payable and
Accrued Liabilities 161,439 140,983
----------- ---------
Total Current Liabilities 167,505 154,151
Long-Term Obligations 241,207 239,387
Deferred Liabilities 56,624 52,585
------------ ----------
Total Liabilities 465,336 446,123
Stockholders' Equity 538,073 469,204
----------- ---------
Total Liabilities and
Stockholders' Equity $1,003,409 $915,327
========== ========
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
SEGMENT INFORMATION
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30 JUNE 30
-------------- ---------------
2002 2001 2002 2001
---- ---- ----- ----
NET SALES
Dispensing Systems $192,941 $195,815 $372,968 $388,996
SeaquistPerfect 43,006 38,267 84,620 80,295
Intersegment Eliminations (2,793) (2,313) (5,727) (4,623)
-------- -------- -------- --------
Total Net Sales $233,154 $231,769 $451,861 $464,668
======== ======== ======== ========
EARNINGS (as reported)
Dispensing Systems $30,262 $34,706 $56,370 $66,255
SeaquistPerfect 3,038 1,681 6,205 4,281
Corporate Expenses and Other (3,476) (2,684) (6,290) (5,583)
Strategic Initiative
Charges (1) (1,304) (7,739) (1,403) (7,739)
Patent Dispute Settlement (1) --- --- (4,168) ---
-------- -------- --------- -------
Earnings before Interest
and Taxes (EBIT) 28,520 25,964 50,714 57,214
Less: Interest Expense, Net 2,418 3,895 4,889 7,858
-------- -------- -------- --------
Income before Income Taxes $ 26,102 $ 22,069 $45,825 $49,356
======== ======== ======== ========
SUPPLEMENTAL 2001 INFORMATION
Goodwill Amortization (2):
Dispensing Systems - $ 875 - $ 1,755
SeaquistPerfect - 25 - 50
Corporate and Other - 3 - 6
-------- ---------
Total Goodwill Amortization - $ 903 - $ 1,811
======= =======
Segment Earnings Excluding
Goodwill Amortization:
Dispensing Systems - $35,581 - $68,010
SeaquistPerfect - 1,706 - 4,331
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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