Highlights
- Record earnings per diluted share (EPS) of $0.76, an increase
of 15% over the prior year quarter
- Record adjusted EPS of $0.78 per diluted share
- Raises full year 2022 adjusted EPS guidance
- Achieved record revenue in each business segment
- Achieved record segment income in Dispensing and Specialty
Closures and Custom Containers
- Increased cash dividend per share by 14.3%
- Redeemed outstanding 4 3/4% Senior Notes due 2025
Silgan Holdings Inc. (Nasdaq:SLGN), a leading supplier of
sustainable rigid packaging solutions for consumer goods products,
today reported first quarter 2022 net income of $84.9 million, or
$0.76 per diluted share, as compared to first quarter 2021 net
income of $73.3 million, or $0.66 per diluted share.
Adjusted net income per diluted share for the first quarter of
2022 was $0.78, after adjustments increasing net income per diluted
share by $0.02. Adjusted net income per diluted share for the first
quarter of 2021 was $0.75, after adjustments increasing net income
per diluted share by $0.09. A reconciliation of net income per
diluted share to “adjusted net income per diluted share,” a
Non-GAAP financial measure used by the Company that adjusts net
income per diluted share for certain items, can be found in Tables
A and B at the back of this press release.
“Silgan continues to demonstrate the power of our portfolio by
performing well in dynamic economic circumstances, delivering
another quarter of record adjusted earnings per diluted share of
$0.78, a 4 percent increase over the prior year record first
quarter and a 70 percent increase over the pre-pandemic first
quarter of 2019,” said Adam Greenlee, President and CEO. “Revenues
grew significantly in each of our businesses as we successfully
passed through raw material and other cost inflation to the market,
and our teams did an outstanding job mitigating other inflationary
items through improved productivity and operating efficiencies.
Volumes for each of our segments would have been even higher had
our customers not continued to be challenged with production
shortfalls due to disruptions in their supply chains and production
facilities. Our Dispensing and Specialty Closures segment benefited
from continued strong demand from the fragrance and beauty markets,
outstanding performance from our 2021 acquisitions and lower resin
costs. Our Metal Containers segment volumes have stabilized well
above pre-pandemic levels, but as expected they were lower in the
first quarter as a result of customer pre-buy activity that
occurred late last year in advance of unprecedented raw material
inflation in 2022. Strong operating performance and lower resin
costs in our Custom Containers segment offset anticipated lower
volumes compared to the final quarter of pandemic driven volumes
last year,” continued Mr. Greenlee. “As we look to the full year of
2022, we see further growth opportunities as we benefit from our
deep customer relationships, stronger than anticipated performance
from our recent acquisitions and the leverage of our broad
operating footprint to improve our performance in the year.
Therefore, we are raising our 2022 adjusted earnings per diluted
share from a range of $3.80 to $4.00 to a range of $3.90 to $4.05,
which represents a 17 percent increase at the midpoint above record
2021 levels,” concluded Mr. Greenlee.
Net sales for the first quarter of 2022 were $1.44 billion, an
increase of $203.8 million, or 16.5 percent, as compared to the
same period in the prior year. This increase was the result of
higher net sales in all segments.
Income before interest and income taxes for the first quarter of
2022 was $143.4 million, an increase of $16.8 million, or 13.3
percent, as compared to $126.6 million for the first quarter of
2021, while margins decreased to 9.9 percent from 10.2 percent for
the same periods. The increase in income before interest and income
taxes was primarily the result of higher income in the Dispensing
and Specialty Closures and Custom Containers segments, partially
offset by lower income in the Metal Containers segment. The
decrease in segment income margin from the prior year period is
primarily due to the mathematical consequence of the pass through
of significant raw material inflation in 2022 in each of the
segments. Rationalization charges were $1.4 million and $10.3
million in the first quarters of 2022 and 2021, respectively.
Interest and other debt expense before loss on early
extinguishment of debt for the first quarter of 2022 was $29.3
million, an increase of $2.9 million as compared to the first
quarter of 2021. This increase was primarily due to higher weighted
average outstanding borrowings during the quarter as a result of
acquisitions in the third and fourth quarters of 2021. Loss on
early extinguishment of debt was $1.5 million and $0.9 million in
the first quarters of 2022 and 2021, respectively.
The effective tax rates were 24.6 percent and 26.2 percent for
the first quarters of 2022 and 2021, respectively. The effective
tax rate in the first quarter of 2021 was unfavorably impacted by
higher income generated in less favorable tax jurisdictions.
Dispensing and Specialty Closures
Net sales of the Dispensing and Specialty Closures segment were
$597.9 million in the first quarter of 2022, an increase of $88.6
million, or 17.4 percent, as compared to $509.3 million in the
first quarter of 2021. This increase was primarily the result of
higher average selling prices due to the pass through of higher raw
material and other inflationary costs and higher unit volumes of
approximately 8 percent, partially offset by unfavorable foreign
currency translation. Unit volumes, which were greater than 20
percent above pre-pandemic volume levels in 2019, increased over
the prior year primarily due to the inclusion of the recent
acquisitions and higher volumes for beauty and fragrance products.
The increase in unit volumes was partially offset by a decrease in
volumes for hygiene and home cleaning products, which continued to
be impacted by an inventory correction throughout the supply chain,
and for metal closures as a result of customer pre-buy activity in
late 2021 in advance of significant metal inflation this year.
Segment income of the Dispensing and Specialty Closures segment
for the first quarter of 2022 increased $21.6 million to an
all-time record $87.3 million as compared to a record $65.7 million
in the first quarter of 2021, and segment income margin increased
to 14.6 percent from 12.9 percent for the same periods. The
increase in segment income was primarily due to the favorable
impact from the delayed pass through of lower resin costs in the
current year period as compared to the unfavorable impact in the
prior year first quarter from the delayed pass through of higher
resin costs, higher unit volumes including from recent
acquisitions, improved operating efficiencies and lower
rationalization charges, partially offset by inflation in
manufacturing costs and the impact of unfavorable foreign currency
translation. Rationalization charges were $5.2 million in the first
quarter of 2021.
Metal Containers
Net sales of the Metal Containers segment were $650.7 million
for the first quarter of 2022, an increase of $96.6 million, or
17.4 percent, as compared to $554.1 million in the first quarter of
2021. As expected, this increase in net sales was primarily the
result of higher average selling prices due to the pass through of
higher raw material and other manufacturing costs, partially offset
by lower unit volumes of approximately 14 percent, a higher
percentage of smaller cans sold and unfavorable foreign currency
translation. The decrease in unit volumes was principally the
result of higher customer purchases in late 2021 in advance of
significant price increases due to the unprecedented metal
inflation this year and customers’ ongoing supply chain and labor
challenges in the current year quarter. Unit volumes, adjusted for
the impact of the customer pre-buy in late 2021, were 10 percent
higher than pre-pandemic volume levels in the first quarter of
2019.
Segment income of the Metal Containers segment in the first
quarter of 2022 was $38.0 million, a decrease of $7.6 million as
compared to $45.6 million in the first quarter of 2021, and segment
income margin decreased to 5.8 percent from 8.2 percent over the
same periods. The decrease in segment income was primarily
attributable to lower unit volumes, the mix impact of more smaller
cans sold and inflation in manufacturing costs, partially offset by
strong manufacturing performance. The decrease in segment income
margin was primarily due to the mathematical consequence of the
pass through of inflation in raw material and other manufacturing
costs in 2022. Rationalization charges were $1.3 million and $5.0
million in the first quarters of 2022 and 2021, respectively.
Custom Containers
Net sales of the Custom Containers segment were $193.3 million
in the first quarter of 2022, an increase of $18.6 million, or 10.6
percent, as compared to $174.7 million in the first quarter of
2021. This increase was principally due to higher average selling
prices related to the pass through of higher resin costs and a more
favorable mix of products sold, partially offset by lower volumes
of approximately 8 percent. The expected decline in volumes was
primarily due to strong pandemic driven demand in the first quarter
of 2021.
Segment income of the Custom Containers segment in the first
quarter of 2022 was $24.7 million, an increase of $0.2 million as
compared to $24.5 million in the first quarter of 2021, while
segment income margin decreased to 12.8 percent from 14.0 percent
over the same periods. The increase in segment income was primarily
attributable to the favorable impact from the delayed pass through
of lower resin costs as compared to the unfavorable impact in the
prior year first quarter from the delayed pass through of higher
resin costs and strong operational performance, partially offset by
lower volumes. The decrease in segment income margin was primarily
due to the mathematical consequence of the pass through of higher
raw material costs.
Outlook for 2022
The Company raised its estimate of adjusted net income per
diluted share for the full year of 2022 to a range of $3.90 to
$4.05, a 17 percent increase at the midpoint of the range as
compared to record adjusted net income per diluted share of $3.40
in 2021. The Company's increased estimate for 2022 anticipates
continued strong performance from recent acquisitions, the ability
to successfully pass through raw material and other cost inflation,
our customers’ ability to gradually increase output as they address
their supply chain and labor challenges, and ongoing operating
efficiencies in each of the segments.
The Company is also providing an estimate of adjusted net income
per diluted share for the second quarter of 2022 in the range of
$0.90 to $1.00, a 12 percent increase at the midpoint of the range
as compared to record adjusted net income per diluted share of
$0.85 in the second quarter of 2021. The second quarter estimate
anticipates benefits from recent acquisitions, continued strong
volumes and manufacturing performance in each of the segments and
an improving labor and supply chain environment, partially offset
by the unfavorable impact of recent increases in resin costs.
The full year and second quarter estimate of adjusted net income
per diluted share for 2022 excludes the impact from rationalization
charges and loss on early extinguishment of debt.
Conference Call
Silgan Holdings Inc. will hold a conference call to discuss the
Company’s results for the first quarter of 2022 at 11:00 a.m.
eastern time on Wednesday, April 27, 2022. The toll free number for
the conference call for those in the U.S. and Canada is (800)
289-0720, and the number for international callers is (313)
209-5140. For those unable to listen to the live call, a taped
rebroadcast will be available through May 11, 2022. To access the
rebroadcast, U.S. and Canadian callers should dial (888) 203-1112,
and international callers should dial (719) 457-0820. The pass code
for the rebroadcast is 4065150.
Silgan is a leading supplier of sustainable rigid packaging
solutions for consumer goods products with annual net sales of
approximately $5.7 billion in 2021. Silgan operates 113
manufacturing facilities in North and South America, Europe and
Asia. The Company is a leading worldwide supplier of dispensing and
specialty closures for food, beverage, health care, garden, home,
personal care, fragrance, and beauty products. The Company is also
a leading supplier of metal containers in North America and Europe
for food and general line products. In addition, the Company is a
leading supplier of custom containers for shelf-stable food and
personal care products in North America.
Statements included in this press release which are not
historical facts are forward looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and the Securities Exchange Act of 1934, as
amended. Such forward looking statements are made based upon
management’s expectations and beliefs concerning future events
impacting the Company and therefore involve a number of
uncertainties and risks, including, but not limited to, those
described in the Company’s Annual Report on Form 10-K for 2021 and
other filings with the Securities and Exchange Commission.
Therefore, the actual results of operations or financial condition
of the Company could differ materially from those expressed or
implied in such forward looking statements.
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
For the quarter ended March
31,
(Dollars in millions, except per
share amounts)
2022
2021
Net sales
$
1,441.9
$
1,238.1
Cost of goods sold
1,208.4
1,016.6
Gross profit
233.5
221.5
Selling, general and administrative
expenses
100.0
97.4
Rationalization charges
1.4
10.3
Other pension and postretirement
income
(11.3
)
(12.8
)
Income before interest and income
taxes
143.4
126.6
Interest and other debt expense before
loss on early
extinguishment of debt
29.3
26.4
Loss on early extinguishment of debt
1.5
0.9
Interest and other debt expense
30.8
27.3
Income before income taxes
112.6
99.3
Provision for income taxes
27.7
26.0
Net income
$
84.9
$
73.3
Earnings per share:
Basic net income per share
$
0.77
$
0.66
Diluted net income per share
$
0.76
$
0.66
Cash dividends per common share
$
0.16
$
0.14
Weighted average shares (000's):
Basic
110,600
110,206
Diluted
111,393
111,030
SILGAN HOLDINGS INC.
CONSOLIDATED SUPPLEMENTAL
FINANCIAL DATA (UNAUDITED)
For the quarter ended March
31,
(Dollars in millions)
2022
2021
Net sales:
Dispensing and Specialty Closures
$ 597.9
$ 509.3
Metal Containers
650.7
554.1
Custom Containers
193.3
174.7
Consolidated
$ 1,441.9
$ 1,238.1
Segment income:
Dispensing and Specialty Closures (a)
$ 87.3
$ 65.7
Metal Containers (b)
38.0
45.6
Custom Containers (c)
24.7
24.5
Corporate
(6.6)
(9.2)
Consolidated
$ 143.4
$ 126.6
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(Dollars in millions)
March 31,
March 31,
Dec. 31,
2022
2021
2021
Assets:
Cash and cash equivalents
$
259.6
$
190.1
$
631.4
Trade accounts receivable, net
852.9
738.1
711.3
Inventories
1,018.7
788.6
798.8
Other current assets
150.6
102.4
154.3
Property, plant and equipment, net
1,979.7
1,811.6
1,993.9
Other assets, net
3,448.9
2,810.7
3,481.1
Total assets
$
7,710.4
$
6,441.5
$
7,770.8
Liabilities and stockholders' equity:
Current liabilities, excluding debt
$
1,177.8
$
960.0
$
1,488.2
Current and long-term debt
3,984.8
3,358.4
3,793.2
Other liabilities
909.6
846.7
926.7
Stockholders' equity
1,638.2
1,276.4
1,562.7
Total liabilities and stockholders'
equity
$
7,710.4
$
6,441.5
$
7,770.8
- Includes rationalization charges of $5.2 million in 2021.
- Includes rationalization charges of $1.3 million and $5.0
million in 2022 and 2021, respectively.
- Includes rationalization charges of $0.1 million in each of
2022 and 2021.
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the quarter ended March
31,
(Dollars in millions)
2022
2021
Cash flows provided by (used in) operating
activities:
Net income
$
84.9
$
73.3
Adjustments to reconcile net income to net
cash
used in operating activities:
Depreciation and amortization
69.1
60.9
Rationalization charges
1.4
10.3
Loss on early extinguishment of debt
1.5
0.9
Other changes that provided (used) cash,
net of effects from acquisitions:
Trade accounts receivable, net
(141.1
)
(103.5
)
Inventories
(222.1
)
(118.1
)
Trade accounts payable and other changes,
net
(61.1
)
(96.0
)
Net cash used in operating activities
(267.4
)
(172.2
)
Cash flows provided by (used in) investing
activities:
Purchase of businesses, net of cash
acquired
(1.3
)
—
Capital expenditures
(68.5
)
(68.8
)
Other investing activities
(0.2
)
0.4
Net cash used in investing activities
(70.0
)
(68.4
)
Cash flows provided by (used in) financing
activities:
Dividends paid on common stock
(18.7
)
(16.1
)
Changes in outstanding checks -
principally vendors
(225.9
)
(84.2
)
Net borrowings and other financing
activities
208.8
126.0
Net cash (used in) provided by financing
activities
(35.8
)
25.7
Effect of exchange rate changes on cash
and cash equivalents
1.4
(4.5
)
Cash and cash equivalents:
Net decrease
(371.8
)
(219.4
)
Balance at beginning of year
631.4
409.5
Balance at end of year
$
259.6
$
190.1
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET
INCOME PER DILUTED SHARE(1)
(UNAUDITED)
For the quarter ended March
31,
Table A
2022
2021
Net income per diluted share as
reported
$
0.76
$
0.66
Adjustments:
Rationalization charges
0.01
0.08
Loss on early extinguishment of debt
0.01
0.01
Adjusted net income per diluted share
$
0.78
$
0.75
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET
INCOME PER DILUTED SHARE(1)
(UNAUDITED)
For the quarter and year
ended,
Table B
Second Quarter,
Year Ended
June 30,
December 31,
Estimated
Actual
Estimated
Actual
Low
High
Low
High
2022
2022
2021
2022
2022
2021
Net income per diluted share as
estimated
for 2022 and as reported for 2021
$
0.90
$
1.00
$
0.85
$
3.87
$
4.02
$
3.23
Adjustments:
Rationalization charges
—
—
—
0.02
0.02
0.11
Costs attributed to announced
acquisitions
—
—
—
—
—
0.03
Purchase accounting write-up of
inventory
—
—
—
—
—
0.02
Loss on early extinguishment of debt
—
—
—
0.01
0.01
0.01
Adjusted net income per diluted share
as estimated for 2022 and presented for
2021
$
0.90
$
1.00
$
0.85
$
3.90
$
4.05
$
3.40
(1) The Company has presented adjusted net income per diluted
share for the periods covered by this press release, which measure
is a Non-GAAP financial measure. The Company’s management believes
it is useful to exclude rationalization charges, costs attributed
to announced acquisitions, the impact from the charge for the
write-up of acquired inventory required under purchase accounting
and the loss on early extinguishment of debt from its net income
per diluted share as calculated under U.S. generally accepted
accounting principles because such Non-GAAP financial measure
allows for a more appropriate evaluation of its operating results.
While rationalization costs are incurred on a regular basis,
management views these costs more as an investment to generate
savings rather than period costs. Costs attributed to announced
acquisitions consist of the Company's third party transaction fees
and expenses that are viewed by management as part of the
acquisition and not indicative of the on-going cost structure of
the Company. The write-up of acquired inventory required under
purchase accounting is also viewed by management as part of the
acquisition and is a non-cash charge that is not considered to be
indicative of the on-going performance of the acquired operations.
The loss on early extinguishment of debt consists of third party
fees and expenses incurred or debt costs written off that are
viewed by management as part of the cost of prepayment of debt and
not indicative of the on-going cost structure of the Company. Such
Non-GAAP financial measure is not in accordance with U.S. generally
accepted accounting principles and should not be considered in
isolation but should be read in conjunction with the unaudited
condensed consolidated statements of income and the other
information presented herein. Additionally, such Non-GAAP financial
measure should not be considered a substitute for net income per
diluted share as calculated under U.S. generally accepted
accounting principles and may not be comparable to similarly titled
measures of other companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220427005194/en/
Robert B. Lewis (203) 406-3160
Silgan (NASDAQ:SLGN)
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