Highlights
- Completed acquisition of Weener Packaging
- Renewed long-term contract with largest customer
- Delivered double digit growth and record volume in dispensing
products
- Record Dispensing and Specialty Closures segment Adjusted
EBIT
- Anticipates significant growth in 2025
Silgan Holdings Inc. (NYSE: SLGN), a leading supplier of
sustainable rigid packaging solutions for the world's essential
consumer goods products, today reported third quarter 2024 net
sales of $1.75 billion and net income of $100.1 million, or $0.93
per diluted share, as compared to third quarter 2023 net sales of
$1.80 billion and net income of $110.6 million, or $1.02 per
diluted share.
Adjusted net income per diluted share for the third quarter of
2024 was $1.21, after adjustments increasing net income per diluted
share by $0.28. Adjusted net income per diluted share for the third
quarter of 2023 was $1.16 after adjustments increasing net income
per diluted share by $0.14. 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 Table A
at the back of this press release.
"Our third quarter results continued to benefit from the success
of our long-term strategic growth initiatives, the power of the
Silgan portfolio and the strength and agility of our operating
teams," said Adam Greenlee, President and CEO. "We are pleased to
have recently closed the Weener acquisition and to welcome 4,000
new Silgan Team members. This acquisition further expands the
breadth, depth and reach of our best-in-class and winning global
dispensing business. Our global dispensing business delivered
another consecutive quarter of double-digit growth in dispensing
products and continues to see success in the marketplace as the
dispensing partner of choice to the world's most iconic brands
driven by our leading innovation and service model. Our Metal
Containers business achieved another significant milestone in the
quarter, delivering high single digit growth in pet food and
successfully extending our decades-long relationship with our
largest Metal Containers customer through the renewal and extension
of our long-term contract. Our Custom Containers business benefited
from the commercialization of new business awards, improved market
demand and strong operating performance, and our teams have
continued to deliver incremental business wins. Overall, we
continue to see positive momentum in our business and remain on
track to drive organic growth and margin improvement in 2024, while
managing through the impact of severe weather and the mixed success
of customer promotional activity," continued Mr. Greenlee. "With
our strategic objectives continuing to deliver organic growth and
the Weener acquisition, including synergies, contributing to our
results, we believe we are well positioned to deliver significant
earnings growth in 2025 and beyond," concluded Mr. Greenlee.
Third Quarter Results
Net sales for the third quarter of 2024 were $1.75 billion, a
decrease of $58.0 million, or 3%, as compared to the same period in
the prior year. Third quarter 2024 net sales declined predominantly
as a result of the contractual pass through of lower raw material
costs, mostly in the Metal Containers segment.
Income before interest and income taxes (EBIT) for the third
quarter of 2024 was $167.3 million, a decrease of $26.8 million as
compared to $194.1 million for the third quarter of 2023. EBIT in
the Dispensing and Specialty Closures, Metal Containers and Custom
Containers segments were $74.7 million, $89.3 million, and $17.1
million, respectively, in the third quarter of 2024.
Rationalization charges were $19.5 million and $6.4 million in the
third quarters of 2024 and 2023, respectively. A reconciliation of
EBIT for each segment to Adjusted EBIT, a Non-GAAP financial
measure used by the Company that adjusts EBIT for certain items,
can be found in Table B at the back of this press release.
Interest and other debt expense for the third quarter of 2024
was $41.9 million, a decrease of $5.4 million as compared to the
third quarter of 2023 primarily due to lower borrowings in the
current year period.
The effective tax rates were 20.2% and 24.7% for the third
quarters of 2024 and 2023, respectively. The effective tax rate in
the third quarter of 2024 was favorably impacted primarily by the
reversal of tax reserves due to the expiration of statutes of
limitation.
Third Quarter Segment Results
Dispensing and Specialty Closures Net sales of the Dispensing
and Specialty Closures segment were $563.7 million in the third
quarter of 2024, an increase of $4.6 million, or 1%, as compared to
$559.1 million in the third quarter of 2023. The increase in net
sales from the prior year quarter was a result of higher volume/mix
of 2%, with double digit improvement and record volume in
dispensing products partially offset by lower than anticipated
closures volumes for certain hot-fill beverages. The improvement in
volume/mix was partially offset by the pass through of lower raw
material costs of 1%.
Dispensing and Specialty Closures Adjusted EBIT increased $1.4
million to a record of $95.2 million in the third quarter of 2024
as compared to $93.8 million in the third quarter of 2023. The
increase in Adjusted EBIT was driven primarily by improved
price/cost, which was partially offset by the unfavorable impact of
foreign currency.
Metal Containers Net sales of the Metal Containers segment were
$1.02 billion in the third quarter of 2024, a decrease of $72.0
million, or 7%, as compared to $1.09 billion in the third quarter
of 2023. Metal containers volume increased 2% during the quarter,
with high single digit growth for pet food markets partially offset
by softer than anticipated volumes for fruit and vegetable markets.
Fruit and vegetable volumes were negatively impacted by both the
planned reduction in volumes by a large pack customer to reduce its
working capital and severe weather that prematurely ended the fruit
and vegetable packs. The increase in volume from the prior year
quarter was offset primarily by unfavorable price/mix as a result
of both the contractual pass through of lower raw material costs
and significantly less favorable mix due to lower volumes for fruit
and vegetable markets and higher volumes for pet food markets.
Metal Containers Adjusted EBIT decreased $16.4 million to $97.1
million in the third quarter of 2024 as compared to $113.5 million
in the third quarter of 2023. The decline in Adjusted EBIT in the
quarter was primarily the result of unfavorable price/cost
including mix, largely as a result of the adverse mix impact of
lower volumes related to the fruit and vegetable pack.
Custom Containers Net sales of the Custom Containers segment
were $158.8 million in the third quarter of 2024, an increase of
$9.4 million, or 6%, as compared to $149.4 million in the third
quarter of 2023. This increase was primarily the result of higher
volumes of 5% largely due to the commercialization of new business
awards.
Custom Containers Adjusted EBIT increased $8.2 million to $20.0
million in the third quarter of 2024 as compared to $11.8 million
in the third quarter of 2023. The increase in Adjusted EBIT was
primarily the result of more favorable price/cost including mix and
higher volume due to the successful commercialization of new
business awards.
Outlook for 2024
The Company has narrowed its estimate of adjusted net income per
diluted share for the full year of 2024 from a range of $3.55 to
$3.75 to a range of $3.55 to $3.65, a 6% increase at the midpoint
of the range over adjusted net income per diluted share of $3.40 in
2023. Volume/mix in the Dispensing and Specialty Closures segment
and volumes in Custom Containers are expected to be higher than
2023 levels. Volumes in the Metal Containers segment are expected
to be comparable to prior year levels. Adjusted net income per
diluted share includes slight accretion from the recently completed
acquisition of Weener Packaging and excludes certain items as
outlined in Table C at the back of this press release.
The Company anticipates interest and other debt expense in 2024
of approximately $170 million and an effective tax rate for 2024 of
approximately 23 - 24%.
The Company is confirming its estimate of free cash flow in 2024
of approximately $375 million, as compared to $356.7 million in
2023. Capital expenditures are expected to be approximately $255
million in 2024.
For the fourth quarter of 2024, the Company expects low single
digit volume growth in the Dispensing and Specialty Closures and
Custom Containers segments. Metal Containers volumes are expected
to be below prior year levels due to the early end to the fruit and
vegetable pack season in 2024 as compared to strong fruit and
vegetable volumes in the fourth quarter of 2023. The Company is
providing an estimate of adjusted net income per diluted share for
the fourth quarter of 2024 in the range of $0.78 to $0.88, a 32%
increase at the midpoint of the range as compared to $0.63 in the
fourth quarter of 2023. Adjusted net income per diluted share
includes slight accretion from the recently completed acquisition
of Weener Packaging and excludes certain items as outlined in Table
C at the back of this press release.
Conference Call
Silgan Holdings Inc. will hold a conference call to discuss the
Company’s results for the third quarter of 2024 at 11:00 a.m.
eastern time on Wednesday, October 30, 2024. The conference call
audio will be webcast live, and both the webcast and this press
release can be accessed at www.silganholdings.com. Those who wish
to participate in the conference call via teleconference from the
U.S. and Canada should dial (866) 416-5346 and from outside the
U.S. and Canada should dial (773) 305-6865. The confirmation code
for the conference call is 6661013. The audio webcast can be
accessed at www.silganholdings.com and will be available for 90
days thereafter for those who are unable to listen to the live
call.
* * *
Silgan is a leading supplier of sustainable rigid packaging
solutions for the world's essential consumer goods products with
annual net sales of approximately $6.0 billion in 2023. Silgan
operates 124 manufacturing facilities in North and South America,
Europe and Asia. The Company is a leading worldwide supplier of
dispensing and specialty closures for fragrance and beauty, food,
beverage, personal and health care, home care and lawn and garden
products. The Company is also a leading supplier of metal
containers in North America and Europe for pet and human 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 2023 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 and nine months
ended September 30,
(Dollars and shares in millions,
except per share amounts)
Third
Quarter
Nine
Months
2024
2023
2024
2023
Net sales
$
1,745.1
$
1,803.1
$
4,443.5
$
4,648.1
Cost of goods sold
1,451.8
1,517.2
3,670.7
3,874.1
Gross profit
293.3
285.9
772.8
774.0
Selling, general and administrative
expenses
106.4
84.3
314.6
287.8
Rationalization charges
19.5
6.4
38.0
13.2
Other pension and postretirement expense
(income)
0.1
1.1
(0.7
)
3.7
Income before interest and income
taxes
167.3
194.1
420.9
469.3
Interest and other debt expense
41.9
47.3
121.9
130.8
Income before income taxes
125.4
146.8
299.0
338.5
Provision for income taxes
25.3
36.2
67.7
77.0
Net income
$
100.1
$
110.6
$
231.3
$
261.5
Earnings per share (EPS):
Basic net income per share
$
0.94
$
1.02
$
2.17
$
2.39
Diluted net income per share
$
0.93
$
1.02
$
2.16
$
2.38
Cash dividends per common share
$
0.19
$
0.18
$
0.57
$
0.54
Weighted average shares:
Basic
106.8
108.4
106.8
109.6
Diluted
107.1
108.8
107.1
110.0
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(Dollars in millions)
Sept. 30,
Sept. 30,
Dec. 31,
2024
2023
2023
Assets:
Cash and cash equivalents
$
368.5
$
307.1
$
642.9
Trade accounts receivable, net
1,210.3
1,295.9
599.5
Inventories
780.4
919.0
940.8
Other current assets
160.2
139.8
165.7
Property, plant and equipment, net
1,956.0
1,911.6
1,961.6
Other assets, net
3,272.0
3,238.9
3,300.7
Total assets
$
7,747.4
$
7,812.3
$
7,611.2
Liabilities and stockholders' equity:
Current liabilities, excluding debt
$
1,051.4
$
1,017.7
$
1,431.4
Current and long-term debt
3,808.1
4,210.5
3,426.8
Other liabilities
833.9
802.2
863.6
Stockholders' equity
2,054.0
1,781.9
1,889.4
Total liabilities and stockholders'
equity
$
7,747.4
$
7,812.3
$
7,611.2
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the nine months ended
September 30,
(Dollars in millions)
2024
2023
Cash flows provided by (used in) operating
activities:
Net income
$
231.3
$
261.5
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
198.6
196.7
Amortization of debt discount and debt
issuance costs
4.0
4.0
Rationalization charges
38.0
13.2
Other changes that provided (used)
cash:
Trade accounts receivable, net
(614.6
)
(638.3
)
Inventories
160.8
(152.9
)
Trade accounts payable and other changes,
net
(232.0
)
(280.2
)
Net cash (used in) operating
activities
(213.9
)
(596.0
)
Cash flows provided by (used in) investing
activities:
Capital expenditures
(192.0
)
(173.5
)
Proceeds from asset sales
3.2
1.6
Other investing activities
(0.3
)
1.3
Net cash (used in) investing
activities
(189.1
)
(170.6
)
Cash flows provided by (used in) financing
activities:
Dividends paid on common stock
(61.8
)
(59.7
)
Changes in outstanding checks -
principally vendors
(160.6
)
(61.4
)
Shares repurchased under authorized
repurchase program
—
(174.7
)
Net borrowings and other financing
activities
356.6
783.4
Net cash provided by financing
activities
134.2
487.6
Effect of exchange rate changes on cash
and cash equivalents
(5.6
)
0.5
Cash and cash equivalents:
Net (decrease)
(274.4
)
(278.5
)
Balance at beginning of year
642.9
585.6
Balance at end of period
$
368.5
$
307.1
SILGAN HOLDINGS INC.
CONSOLIDATED SUPPLEMENTAL
SEGMENT FINANCIAL DATA
(UNAUDITED)
For the quarter and nine months
ended September 30,
(Dollars in millions)
Third
Quarter
Nine
Months
2024
2023
2024
2023
Net sales:
Dispensing and Specialty Closures
$
563.7
$
559.1
$
1,665.0
$
1,699.1
Metal Containers
1,022.6
1,094.6
2,290.5
2,475.6
Custom Containers
158.8
149.4
488.0
473.4
Consolidated
$
1,745.1
$
1,803.1
$
4,443.5
$
4,648.1
Income before interest and income taxes
(EBIT)
Dispensing and Specialty Closures
$
74.7
$
78.0
$
213.3
$
212.6
Metal Containers
89.3
110.1
187.3
231.6
Custom Containers
17.1
10.7
55.5
46.1
Corporate
(13.8
)
(4.7
)
(35.2
)
(21.0
)
Consolidated
$
167.3
$
194.1
$
420.9
$
469.3
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET
INCOME PER DILUTED SHARE (1)
(UNAUDITED)
For the quarter and nine months
ended September 30,
(Dollars and shares in millions,
except per share amounts)
Table A
Third
Quarter
Nine
Months
2024
2023
2024
2023
Net
Diluted
Net
Diluted
Net
Diluted
Net
Diluted
Income
EPS
Income
EPS
Income
EPS
Income
EPS
U.S. GAAP net income and diluted EPS
$
100.1
$
0.93
$
110.6
$
1.02
$
231.3
$
2.16
$
261.5
$
2.38
Adjustments (a)
29.8
0.28
15.2
0.14
65.7
0.61
42.4
0.38
Non-U.S. GAAP adjusted net income and
adjusted diluted EPS
$
129.9
$
1.21
$
125.8
$
1.16
$
297.0
$
2.77
$
303.9
$
2.76
Weighted average number of common shares
outstanding - Diluted
107.1
108.8
107.1
110.0
(a) Adjustments consist of items in the
table below
Third
Quarter
Nine
Months
2024
2023
2024
2023
Adjustments:
Acquired intangible asset amortization
expense
$
12.4
$
13.3
$
38.0
$
39.9
Other pension (income) expense for U.S.
pension plans
(0.7
)
0.6
(3.1
)
2.2
Rationalization charges
19.5
6.4
38.0
13.2
Costs attributed to announced
acquisitions
7.1
—
12.6
—
Pre-tax impact of adjustments
38.3
20.3
85.5
55.3
Tax impact of adjustments
8.5
5.1
19.8
12.9
Net impact of adjustments
$
29.8
$
15.2
$
65.7
$
42.4
Weighted average number of common shares
outstanding - Diluted
107.1
108.8
107.1
110.0
Diluted EPS impact from adjustments
$
0.28
$
0.14
$
0.61
$
0.38
Adjusted tax rate
20.7
%
24.8
%
22.8
%
22.8
%
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED
EBIT (2)
(UNAUDITED)
For the quarter and nine months
ended September 30,
(Dollars in millions)
Table
B
Third
Quarter
Nine
Months
2024
2023
2024
2023
Dispensing and Specialty
Closures:
Income before interest and income taxes
(EBIT)
$
74.7
$
78.0
$
213.3
$
212.6
Acquired intangible asset amortization
expense
10.9
11.8
33.6
35.4
Other pension (income) expense for U.S.
pension plans
(0.2
)
0.2
(0.7
)
0.4
Rationalization charges
9.8
3.8
19.6
5.2
Adjusted EBIT
$
95.2
$
93.8
$
265.8
$
253.6
Metal Containers:
Income before interest and income taxes
(EBIT)
$
89.3
$
110.1
$
187.3
$
231.6
Acquired intangible asset amortization
expense
0.4
0.4
1.0
1.1
Other pension (income) expense for U.S.
pension plans
(0.5
)
0.4
(1.7
)
1.1
Rationalization charges
7.9
2.6
13.9
7.9
Adjusted EBIT
$
97.1
$
113.5
$
200.5
$
241.7
Custom Containers:
Income before interest and income taxes
(EBIT)
$
17.1
$
10.7
$
55.5
$
46.1
Acquired intangible asset amortization
expense
1.1
1.1
3.4
3.4
Other pension (income) expense for U.S.
pension plans
—
—
(0.7
)
0.7
Rationalization charges
1.8
—
4.5
0.1
Adjusted EBIT
$
20.0
$
11.8
$
62.7
$
50.3
Corporate:
(Loss) before interest and income taxes
(EBIT)
$
(13.8
)
$
(4.7
)
$
(35.2
)
$
(21.0
)
Costs attributed to announced
acquisitions
7.1
—
12.6
—
Adjusted EBIT
$
(6.7
)
$
(4.7
)
$
(22.6
)
$
(21.0
)
Total adjusted EBIT
$
205.6
$
214.4
$
506.4
$
524.6
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET
INCOME PER DILUTED SHARE (1)
(UNAUDITED)
For the quarter and year
ended,
(Dollars and shares in millions,
except per share amounts)
Table
C
Fourth
Quarter,
Year
Ended
December
31,
December
31,
Estimated
Actual
Estimated
Actual
Low
High
Low
High
2024
2024
2023
2024
2024
2023
U.S. GAAP net income as estimated for 2024
and as reported for 2023
$
56.1
$
66.8
$
64.4
$
287.0
$
297.7
$
326.0
Adjustments (a)
27.5
27.5
3.2
93.2
93.2
45.5
Non-U.S. GAAP adjusted net income as
estimated for 2024 and presented for 2023
$
83.6
$
94.3
$
67.6
$
380.2
$
390.9
$
371.5
U.S. GAAP diluted EPS as estimated for
2024 and as reported for 2023
$
0.52
$
0.62
$
0.60
$
2.68
$
2.78
$
2.98
Adjustments (a)
0.26
0.26
0.03
0.87
0.87
0.42
Non-U.S. GAAP adjusted diluted EPS as
estimated for 2024 and presented for 2023
$
0.78
$
0.88
$
0.63
$
3.55
$
3.65
$
3.40
(a) Adjustments consist of items in the
table below
Fourth
Quarter,
Year
Ended
December
31,
December
31,
2024
2023
2024
2023
Estimated
Actual
Estimated
Actual
Adjustments:
Acquired intangible asset amortization
expense
$
15.6
$
13.3
$
53.6
$
53.1
Other pension (income) expense for U.S.
pension plans
(1.0
)
1.3
(4.1
)
3.6
Rationalization charges (credits)
3.5
(4.8
)
41.5
8.4
Costs attributed to announced
acquisitions
15.0
—
27.6
—
Purchase accounting write-up of
inventory
4.0
—
4.0
—
Pre-tax impact of adjustments
37.1
9.8
122.6
65.1
Tax impact of adjustments
9.6
6.6
29.4
19.6
Net impact of adjustments
$
27.5
$
3.2
$
93.2
$
45.5
Weighted average number of common shares
outstanding - Diluted
107.2
106.9
107.1
109.2
Diluted EPS impact from adjustments
$
0.26
$
0.03
$
0.87
$
0.42
(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 acquired intangible asset amortization
expense, other pension (income) expense for U.S. pension plans,
rationalization charges, costs attributed to announced acquisitions
and the impact from the charge for the write-up of acquired
inventory required under purchase accounting 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.
Acquired intangible asset amortization expense is a non-cash
expense related to acquired operations that management believes is
not indicative of the on-going performance of the acquired
operations. Since the Company's U.S. pension plans are
significantly over funded and have no required cash contributions
for the foreseeable future based on current regulations, management
views other pension (income) expense from the Company's U.S.
pension plans, which excludes service costs, as not reflective of
the operational performance of the Company or its segments. 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 third party 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. 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.
(2) The Company has presented adjusted EBIT 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 acquired intangible asset amortization expense, other
pension (income) expense for U.S. pension plans, rationalization
charges and costs attributed to announced acquisitions from EBIT
for the Company and each of its segments as calculated under U.S.
generally accepted accounting principles because such Non-GAAP
financial measure allows for a more appropriate evaluation of
operating results. Acquired intangible asset amortization expense
is a non-cash expense related to acquired operations that
management believes is not indicative of the on-going performance
of the acquired operations. Since the Company's U.S. pension plans
are significantly over funded and have no required cash
contributions for the foreseeable future based on current
regulations, management views other pension (income) expense from
the Company's U.S. pension plans, which excludes service costs, as
not reflective of the operational performance of the Company or its
segments. 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 third party 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. 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 income before
interest and income taxes (EBIT) 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/20241030409708/en/
Alexander Hutter Vice President, Investor Relations
AHutter@silgan.com 203-406-3187
Silgan (NYSE:SLGN)
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