Aptar Reports First Quarter Results

AptarGroup, Inc. (NYSE:ATR) today reported first quarter results for 2019.

First Quarter 2019 Summary

• Reported sales increased 6%
• Core sales, excluding currency and acquisition effects, grew 7%
• Reported earnings per share increased 4% to $0.96 compared to prior year earnings per share of $0.92
• Adjusted earnings per share increased 16% to $1.07 compared to prior year adjusted earnings per share of $0.92 (including comparable exchange rates)
• Reported net income increased 6%
• Adjusted EBITDA increased 15%, despite foreign currency headwinds
• Increased quarterly dividend 6% to $0.36 per share; 2019 will be our 26th consecutive year of paying increased annual dividends

First Quarter Results

For the quarter ended March 31, 2019, reported sales increased to $744 million compared to $703 million in the prior year. Core sales, excluding the negative impact from changes in currency exchange rates and positive acquisition effects, increased approximately 7%.

Commenting on the quarter, Stephan Tanda, President and CEO, said, “We continued to see positive sales momentum. Our Pharma segment had an exceptionally strong quarter with broad-based demand across our portfolio of innovative drug delivery devices. Our other two segments also grew core sales over the prior year and this was in spite of a decrease in custom tooling sales in our Food + Beverage segment. Profit margins also improved over the prior year due to the mix of business, benefits from our business transformation and positive effects of a decline in resin cost.”

Aptar reported earnings per share of $0.96 compared to $0.92 reported a year ago. Current year adjusted earnings per share, excluding restructuring expenses, were $1.07 and up 16% from the prior year adjusted earnings per share, including comparable exchange rates, of $0.92. The current period effective tax rate on adjusted earnings was 30% compared to 27% in the prior year.

Outlook

Commenting on Aptar’s outlook, Tanda said, “We anticipate continued positive product sales growth across most of our markets, although the level of custom tooling sales reported in the second quarter of 2018 is not expected to repeat.”

Aptar expects earnings per share for the second quarter, excluding any restructuring costs, to be in the range of $1.09 to $1.15 and this guidance is based on an effective tax rate range of 29% to 31%. The midrange of this guidance represents an improvement of approximately 7% over the prior year adjusted earnings per share when stated using comparable currency rates. The prior year second quarter effective tax rate on adjusted earnings was 26%.

Share Repurchase Authorization and Cash Dividend

As previously reported, the Board authorized the repurchase of up to $350 million of the Company’s common stock. This new authorization replaces all previous authorizations. Aptar may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions. The Board also increased the quarterly cash dividend by 6% to $0.36 per share. The payment date is May 22, 2019, to stockholders of record as of May 1, 2019. 2019 becomes the 26th consecutive year in which Aptar has paid increased annual dividends to shareholders.

Open Conference Call

There will be a conference call on Wednesday, May 1, 2019 at 8:00 a.m. Central Time to discuss the Company’s first quarter results for 2019. 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 for a limited time on the Investor Relations page of the website.

Aptar is a leading global supplier of a broad range of innovative dispensing, sealing and active packaging solutions for the beauty, personal care, home care, prescription drug, consumer health care, injectables, food and beverage markets. Aptar uses insights, design, engineering and science to create innovative packaging technologies that build brand value for its customers, and, in turn, make a meaningful difference in the lives, looks, health and homes of people around the world. Aptar is headquartered in Crystal Lake, Illinois and has over 14,000 dedicated employees in 18 different countries. For more information, visit www.aptar.com.

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 costs, acquisition costs and purchase accounting adjustments that affected inventory values. 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. 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, 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” 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 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: the successful integration of acquisitions; the impact of tax reform legislation including changes in tax rates and other tax-related events or transactions that could impact our effective tax rate; the execution of the business transformation plan; economic conditions worldwide including potential deflationary or inflationary conditions in regions we rely on for growth; political conditions worldwide; significant fluctuations in foreign currency exchange rates; changes in customer and/or consumer spending levels; financial conditions of customers and suppliers; consolidations within our customer or supplier bases; fluctuations in the cost of materials, components and other input costs; the availability of raw materials and components; our ability to successfully implement facility expansions and new facility projects; our ability to increase prices, contain costs and improve productivity; changes in capital availability or cost, including interest rate fluctuations; volatility of global credit markets; cybersecurity threats that could impact our networks and reporting systems; fiscal and monetary policies and other regulations; direct or indirect consequences of acts of war or terrorism; work stoppages due to labor disputes; and competition, including technological advances. For additional information on these and other risks and uncertainties, please see our filings with the Securities and Exchange Commission, including the discussion under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-Ks and Form 10-Qs. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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