Highlights
- First quarter 2024 adjusted EPS at the high end of the
estimated range
- Expects improving demand trends in the second quarter of
2024
- Significant progress on multi-year $50 million cost reduction
program
- Confirms full year estimates
Silgan Holdings Inc. (NYSE: SLGN), a leading supplier of
sustainable rigid packaging solutions for the world's essential
consumer goods products, today reported first quarter 2024 net
sales of $1.32 billion and net income of $55.2 million, or $0.52
per diluted share, as compared to first quarter 2023 net sales of
$1.42 billion and net income of $72.0 million, or $0.65 per diluted
share.
Adjusted net income per diluted share for the first quarter of
2024 was $0.69, after adjustments increasing net income per diluted
share by $0.17. Adjusted net income per diluted share for the first
quarter of 2023 was $0.78 after adjustments increasing net income
per diluted share by $0.13. 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.
"The Silgan team delivered strong first quarter results at the
high end of our guidance range, which continued to display the
power of our diverse portfolio and winning long-term business
strategy," said Adam Greenlee, President and CEO. "Our global
dispensing business is well positioned to deliver another year of
growth and strong results through market leading innovation, strong
end market demand, additional business wins and significant
momentum in the marketplace. Consumer demand for our food and
beverage products remains resilient, and our first quarter volumes,
as expected, were impacted by our customers' first half destocking
priorities. In certain markets, customers accelerated those
activities to be more weighted to the first quarter than initially
anticipated. In our Custom Containers business, we're encouraged
that volumes improved sequentially, and we have also successfully
commercialized a new business award as expected in the first
quarter. Overall, we continue to see positive signs in each of our
businesses with increased promotional activity at retail and
improving demand trends," continued Mr. Greenlee. "We remain
focused on meeting the unique needs of our customers while actively
managing what is within our control. We have made significant
progress towards our $50 million cost reduction program and are
confident in our ability to deliver $20 million of cost savings in
2024. Importantly, we are on track to deliver our 2024 objectives
and are encouraged with the opportunities that remain in 2024 and
beyond," concluded Mr. Greenlee.
First Quarter Results
Net sales for the first quarter of 2024 were $1.32 billion, a
decrease of $101.3 million, or 7%, as compared to record sales in
the same period in the prior year. First quarter 2024 net sales
declined predominantly as a result of lower volumes and the pass
through of lower raw material costs.
Income before interest and income taxes (EBIT) for the first
quarter of 2024 was $111.7 million, a decrease of $19.5 million as
compared to $131.2 million for the first quarter of 2023. EBIT in
the Dispensing and Specialty Closures, Metal Containers and Custom
Containers segments were $59.7 million, $41.7 million, and $17.8
million, respectively, in the first quarter of 2024.
Rationalization charges were $11.7 million and $4.1 million in the
first 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 first quarter of 2024
was $38.6 million, an increase of $1.8 million as compared to the
first quarter of 2023 primarily due to the impact of higher
interest rates.
The effective tax rates were 24.5% and 23.8% for the first
quarters of 2024 and 2023, respectively.
First Quarter Segment Results
Dispensing and Specialty Closures Net sales of the Dispensing
and Specialty Closures segment were $535.9 million in the first
quarter of 2024, a decrease of $44.0 million, or 8%, as compared to
$579.9 million in the first quarter of 2023. The decrease in net
sales from the prior year quarter was a result of lower volume/mix
of 8%, driven by double digit declines in higher volume closures
for food and beverage markets due to customer destocking priorities
that accelerated to be more weighted to the first quarter. Demand
for global dispensing products remained strong during the
quarter.
Dispensing and Specialty Closures adjusted EBIT decreased $5.1
million to $77.8 million in the first quarter of 2024 as compared
to $82.9 million in the first quarter of 2023. The decrease in
adjusted EBIT was driven primarily by lower volume/mix, which was
partially offset by favorable price/cost. Favorable price/cost was
driven by improved manufacturing productivity that overcame the
negative impact of the sell through of higher cost inventory from
the prior year in our European food and beverage closures
operations due to lower metal costs in 2024.
Metal Containers Net sales of the Metal Containers segment were
$617.1 million in the first quarter of 2024, a decrease of $53.0
million, or 8%, as compared to $670.1 million in the first quarter
of 2023. The decrease in net sales from the prior year quarter was
primarily a result of lower unit volume of 5% driven by continued
customer destocking across several categories, as compared to very
strong demand in the first quarter of 2023, and the contractual
pass through of lower raw material costs.
Metal Containers adjusted EBIT decreased $7.4 million to $45.0
million in the first quarter of 2024 as compared to $52.4 million
in the first quarter of 2023. The anticipated decline in adjusted
EBIT in the quarter was predominantly the result of unfavorable
price/cost including mix, due mostly to the sell through of higher
cost inventory from the prior year in our European Metal Containers
operations due to lower metal costs in 2024, and lower volume,
which was partially offset by improved SG&A cost
management.
Custom Containers Net sales of the Custom Containers segment
were $164.0 million in the first quarter of 2024, a decrease of
$4.3 million, or 3%, as compared to $168.3 million in the first
quarter of 2023. This decrease was primarily the result of lower
volumes of 3% due to continued customer destocking activity.
Custom Containers adjusted EBIT increased $0.1 million to $20.2
million in the first quarter of 2024 as compared to $20.1 million
in the first quarter of 2023. The increase in adjusted EBIT was
primarily the result of more favorable price/cost including mix,
which was partly offset by lower volumes.
Outlook for 2024
The Company is confirming its estimate of adjusted net income
per diluted share for the full year of 2024 in the range of $3.55
to $3.75, a 7% increase at the midpoint of the range over adjusted
net income per diluted share of $3.40 in 2023. Volumes in all
segments for 2024 are expected to be higher than 2023 levels.
Adjusted net income per diluted share 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 24 - 25%.
The Company currently estimates that free cash flow in 2024 will
be approximately $375 million as compared to $356.7 million in
2023. Capital expenditures are expected to be approximately $240
million in 2024.
For the second quarter of 2024, the Company expects low to mid
single digit volume growth in the Dispensing and Specialty Closures
segment, low single digit volume growth in the Custom Containers
segment, and comparable volumes in the Metal Containers segment as
compared to the prior year period. The Company is providing an
estimate of adjusted net income per diluted share for the second
quarter of 2024 in the range of $0.82 to $0.92, a 5% increase at
the midpoint of the range as compared to $0.83 in the second
quarter of 2023. Adjusted net income per diluted share 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 first quarter of 2024 at 11:00 a.m.
eastern time on Wednesday, May 1, 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) 400-0049 and from outside the U.S. and
Canada should dial (323) 701-0225. The confirmation code for the
conference call is 9625579. 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 106 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 ended March
31,
(Dollars and shares in millions,
except per share amounts)
2024
2023
Net sales
$
1,317.0
$
1,418.3
Cost of goods sold
1,093.5
1,180.3
Gross profit
223.5
238.0
Selling, general and administrative
expenses
100.5
101.4
Rationalization charges
11.7
4.1
Other pension and postretirement (income)
expense
(0.4
)
1.3
Income before interest and income
taxes
111.7
131.2
Interest and other debt expense
38.6
36.8
Income before income taxes
73.1
94.4
Provision for income taxes
17.9
22.4
Net income
$
55.2
$
72.0
Earnings per share (EPS):
Basic net income per share
$
0.52
$
0.65
Diluted net income per share
$
0.52
$
0.65
Cash dividends per common share
$
0.19
$
0.18
Weighted average shares:
Basic
106.6
110.2
Diluted
107.1
110.8
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(Dollars in millions)
March 31,
March 31,
Dec. 31,
2024
2023
2023
Assets:
Cash and cash equivalents
$
308.6
$
501.1
$
642.9
Trade accounts receivable, net
946.1
936.0
599.5
Inventories
957.2
1,055.1
940.8
Other current assets
164.4
132.8
165.7
Property, plant and equipment, net
1,943.7
1,930.0
1,961.6
Other assets, net
3,254.3
3,306.7
3,300.7
Total assets
$
7,574.3
$
7,861.7
$
7,611.2
Liabilities and stockholders' equity:
Current liabilities, excluding debt
$
943.6
$
1,059.3
$
1,431.4
Current and long-term debt
3,880.4
4,155.1
3,426.8
Other liabilities
850.5
866.0
863.6
Stockholders' equity
1,899.8
1,781.3
1,889.4
Total liabilities and stockholders'
equity
$
7,574.3
$
7,861.7
$
7,611.2
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the quarter ended March
31,
(Dollars in millions)
2024
2023
Cash flows provided by (used in) operating
activities:
Net income
$
55.2
$
72.0
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
66.4
64.9
Amortization of debt discount and debt
issuance costs
1.3
1.3
Rationalization charges
11.7
4.1
Other changes that provided (used)
cash:
Trade accounts receivable, net
(355.6
)
(271.2
)
Inventories
(22.3
)
(280.0
)
Trade accounts payable and other changes,
net
(304.5
)
(222.8
)
Net cash (used in) operating
activities
(547.8
)
(631.7
)
Cash flows provided by (used in) investing
activities:
Capital expenditures
(75.3
)
(67.9
)
Proceeds from asset sales
2.5
0.4
Other investing activities
0.3
0.5
Net cash (used in) investing
activities
(72.5
)
(67.0
)
Cash flows provided by (used in) financing
activities:
Dividends paid on common stock
(21.1
)
(20.6
)
Changes in outstanding checks -
principally vendors
(160.6
)
(61.4
)
Shares repurchased under authorized
repurchase program
—
(4.8
)
Net borrowings and other financing
activities
474.4
697.2
Net cash provided by financing
activities
292.7
610.4
Effect of exchange rate changes on cash
and cash equivalents
(6.7
)
3.8
Cash and cash equivalents:
Net (decrease)
(334.3
)
(84.5
)
Balance at beginning of year
642.9
585.6
Balance at end of period
$
308.6
$
501.1
SILGAN HOLDINGS INC.
CONSOLIDATED SUPPLEMENTAL
SEGMENT FINANCIAL DATA
(UNAUDITED)
For the quarter ended March
31,
(Dollars in millions)
2024
2023
Net sales:
Dispensing and Specialty Closures
$
535.9
$
579.9
Metal Containers
617.1
670.1
Custom Containers
164.0
168.3
Consolidated
$
1,317.0
$
1,418.3
Income before interest and income taxes
(EBIT)
Dispensing and Specialty Closures
$
59.7
$
70.9
Metal Containers
41.7
47.8
Custom Containers
17.8
18.5
Corporate
(7.5
)
(6.0
)
Consolidated
$
111.7
$
131.2
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED NET
INCOME PER DILUTED SHARE (1)
(UNAUDITED)
For the quarter ended March
31,
(Dollars and shares in millions,
except per share amounts)
Table
A
2024
2023
Net
Diluted
Net
Diluted
Income
EPS
Income
EPS
U.S. GAAP net income and diluted EPS
$
55.2
$
0.52
$
72.0
$
0.65
Adjustments (a)
18.0
0.17
14.4
0.13
Non-U.S. GAAP adjusted net income and
adjusted diluted EPS
$
73.2
$
0.69
$
86.4
$
0.78
Weighted average number of common shares
outstanding - Diluted
107.1
110.8
(a) Adjustments consist of items in the
table below
2024
2023
Adjustments:
Acquired intangible asset amortization
expense
$
13.3
$
13.2
Other pension (income) expense for U.S.
pension plans
(1.2
)
0.9
Rationalization charges
11.7
4.1
Pre-tax impact of adjustments
23.8
18.2
Tax impact of adjustments
5.8
3.8
Net impact of adjustments
$
18.0
$
14.4
Weighted average number of common shares
outstanding - Diluted
107.1
110.8
Diluted EPS impact from adjustments
$
0.17
$
0.13
Adjusted tax rate
24.5
%
23.3
%
SILGAN HOLDINGS INC.
RECONCILIATION OF ADJUSTED
EBIT (2)
(UNAUDITED)
For the quarter ended March
31,
(Dollars in millions)
Table
B
2024
2023
Dispensing and
Specialty Closures:
Income before interest and income taxes
(EBIT)
$
59.7
$
70.9
Acquired intangible asset amortization
expense
11.9
11.8
Other pension (income) expense for U.S.
pension plans
(0.3
)
0.1
Rationalization charges
6.5
0.1
Adjusted EBIT
$
77.8
$
82.9
Metal
Containers:
Income before interest and income taxes
(EBIT)
$
41.7
$
47.8
Acquired intangible asset amortization
expense
0.3
0.3
Other pension (income) expense for U.S.
pension plans
(0.6
)
0.4
Rationalization charges
3.6
3.9
Adjusted EBIT
$
45.0
$
52.4
Custom
Containers:
Income before interest and income taxes
(EBIT)
$
17.8
$
18.5
Acquired intangible asset amortization
expense
1.1
1.1
Other pension (income) expense for U.S.
pension plans
(0.3
)
0.4
Rationalization charges
1.6
0.1
Adjusted EBIT
$
20.2
$
20.1
Corporate:
Loss before interest and income taxes
(EBIT)
$
(7.5
)
$
(6.0
)
Adjusted EBIT
$
(7.5
)
$
(6.0
)
Total adjusted EBIT
$
135.5
$
149.4
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
Second
Quarter,
Year
Ended
June
30,
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
$
75.9
$
86.6
$
78.9
$
330.6
$
352.0
$
326.0
Adjustments (a)
11.8
11.8
12.8
49.6
49.6
45.5
Non-U.S. GAAP adjusted net income as
estimated for 2024 and presented for 2023
$
87.7
$
98.4
$
91.7
$
380.2
$
401.6
$
371.5
U.S. GAAP diluted EPS as estimated for
2024 and as reported for 2023
$
0.71
$
0.81
$
0.71
$
3.09
$
3.29
$
2.98
Adjustments (a)
0.11
0.11
0.12
0.46
0.46
0.42
Non-U.S. GAAP adjusted diluted EPS as
estimated for 2024 and presented for 2023
$
0.82
$
0.92
$
0.83
$
3.55
$
3.75
$
3.40
(a) Adjustments consist of items in the
table below
Second
Quarter,
Year
Ended
June
30,
December
31,
2024
2023
2024
2023
Estimated
Actual
Estimated
Actual
Adjustments:
Acquired intangible asset amortization
expense
$
12.3
$
13.3
$
50.3
$
53.1
Other pension (income) expense for U.S.
pension plans
(1.2
)
0.8
(4.8
)
3.6
Rationalization charges
4.5
2.7
20.2
8.4
Pre-tax impact of adjustments
15.6
16.8
65.7
65.1
Tax impact of adjustments
3.8
4.0
16.1
19.6
Net impact of adjustments
$
11.8
$
12.8
$
49.6
$
45.5
Weighted average number of common shares
outstanding - Diluted
107.0
110.5
107.1
109.2
Diluted EPS impact from adjustments
$
0.11
$
0.12
$
0.46
$
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 and
rationalization charges 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. 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 and rationalization
charges 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. 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/20240501610857/en/
Alexander Hutter Vice President, Investor Relations
AHutter@silgan.com 203-406-3187
Silgan (NYSE:SLGN)
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