AptarGroup Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-11846

AptarGroup, Inc.


DELAWARE		36-3853103
(State of Incorporation)		(I.R.S. Employer Identification No.)

265 EXCHANGE DRIVE, SUITE 100, CRYSTAL LAKE, ILLINOIS 60014

815-477-0424

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	ATR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer þ	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ◻ No þ

The number of shares outstanding of common stock, as of July 24, 2020, was 64,473,805 shares.

Table of Contents

AptarGroup, Inc.

Form 10-Q

Quarter Ended June 30, 2020

INDEX


Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Income – Three and Six Months Ended June 30, 2020 and 2019	1

	Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, 2020 and 2019	2

	Condensed Consolidated Balance Sheets – June 30, 2020 and December 31, 2019	3

	Condensed Consolidated Statements of Changes in Equity – Three and Six Months Ended June 30, 2020 and 2019	5

	Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2020 and 2019	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	43

Item 4.	Controls and Procedures	43

Part II.	OTHER INFORMATION

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 5.	Other Information	45

Item 6.	Exhibits	45

	Signature	46

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

AptarGroup, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


In thousands, except per share amounts

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019

Net Sales	$	699,305	$	742,661	$	1,420,858	$	1,487,121
Operating Expenses:
Cost of sales (exclusive of depreciation and amortization shown below)		441,702		469,441		892,958		938,573
Selling, research & development and administrative		123,365		113,752		249,557		234,967
Depreciation and amortization		56,429		47,867		107,235		95,356
Restructuring initiatives		7,331		1,737		12,170		11,267
		628,827		632,797		1,261,920		1,280,163
Operating Income		70,478		109,864		158,938		206,958

Other (Expense) Income:
Interest expense		(8,734)		(8,756)		(17,122)		(17,970)
Interest income		175		1,033		350		2,781
Equity in results of affiliates		(328)		9		(1,127)		(86)
Miscellaneous, net		(923)		(49)		(2,335)		417
		(9,810)		(7,763)		(20,234)		(14,858)

Income before Income Taxes		60,668		102,101		138,704		192,100

Provision for Income Taxes		18,808		28,180		41,594		55,180

Net Income	$	41,860	$	73,921	$	97,110	$	136,920

Net Income Attributable to Noncontrolling Interests	$	(21)	$	(6)	$	(18)	$	(1)

Net Income Attributable to AptarGroup, Inc.	$	41,839	$	73,915	$	97,092	$	136,919

Net Income Attributable to AptarGroup, Inc. per Common Share:
Basic	$	0.65	$	1.16	$	1.51	$	2.17
Diluted	$	0.63	$	1.12	$	1.47	$	2.08

Average Number of Shares Outstanding:
Basic		64,262		63,471		64,135		63,219
Diluted		66,384		66,232		66,246		65,842

Dividends per Common Share	$	0.36	$	0.36	$	0.72	$	0.70

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

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AptarGroup, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


In thousands

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019

Net Income	$	41,860	$	73,921	$	97,110	$	136,920
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		19,096		9,414		(23,133)		(197)
Changes in derivative (losses) gains, net of tax		(733)		(479)		750		(872)
Defined benefit pension plan, net of tax
Amortization of prior service cost included in net income, net of tax		72		83		143		167
Amortization of net loss included in net income, net of tax		1,368		633		2,933		1,270
Total defined benefit pension plan, net of tax		1,440		716		3,076		1,437
Total other comprehensive income (loss)		19,803		9,651		(19,307)		368
Comprehensive Income		61,663		83,572		77,803		137,288
Comprehensive (Income) Loss Attributable to Noncontrolling Interests		(22)		2		(19)		(1)
Comprehensive Income Attributable to AptarGroup, Inc.	$	61,641	$	83,574	$	77,784	$	137,287

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

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AptarGroup, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


In thousands

		June 30,		December 31,
		2020		2019
Assets
Current Assets:
Cash and equivalents	$	247,656	$	241,970
Accounts and notes receivable, less current expected credit loss ("CECL") of $6,080 in 2020 and $3,626 in 2019		575,655		558,428
Inventories		381,939		375,795
Prepaid and other		138,321		115,048
		1,343,571		1,291,241
Property, Plant and Equipment:
Buildings and improvements		521,312		504,328
Machinery and equipment		2,578,354		2,521,737
		3,099,666		3,026,065
Less: Accumulated depreciation		(2,028,101)		(1,963,520)
		1,071,565		1,062,545
Land		26,355		25,133
		1,097,920		1,087,678
Other Assets:
Investments in equity securities		44,193		8,396
Goodwill		861,928		763,461
Intangible assets, net		352,740		291,084
Operating lease right-of-use assets		68,665		72,377
Miscellaneous		44,999		47,882
		1,372,525		1,183,200
Total Assets	$	3,814,016	$	3,562,119

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

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AptarGroup, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


In thousands, except share and per share amounts

		June 30,		December 31,
		2020		2019
Liabilities and Stockholders’ Equity
Current Liabilities:
Notes payable, revolving credit facility and overdrafts	$	150,831	$	44,259
Current maturities of long-term obligations, net of unamortized debt issuance costs		66,248		65,988
Accounts payable, accrued and other liabilities		612,688		573,028
		829,767		683,275
Long-Term Obligations, net of unamortized debt issuance costs		1,082,742		1,085,453
Deferred Liabilities and Other:
Deferred income taxes		39,414		41,388
Retirement and deferred compensation plans		108,896		101,225
Operating lease liabilities		52,036		55,276
Deferred and other non-current liabilities		55,175		23,250
Commitments and contingencies		—		—
		255,521		221,139
Stockholders’ Equity:
AptarGroup, Inc. stockholders’ equity
Common stock, $.01 par value, 199 million shares authorized, 69.0 and 68.6 million shares issued as of June 30, 2020 and December 31, 2019, respectively		690		686
Capital in excess of par value		803,511		770,596
Retained earnings		1,573,392		1,523,820
Accumulated other comprehensive loss		(361,256)		(341,948)
Less: Treasury stock at cost, 4.7 and 4.8 million shares as of June 30, 2020 and December 31, 2019, respectively		(370,706)		(381,238)
Total AptarGroup, Inc. Stockholders’ Equity		1,645,631		1,571,916
Noncontrolling interests in subsidiaries		355		336
Total Stockholders’ Equity		1,645,986		1,572,252
Total Liabilities and Stockholders’ Equity	$	3,814,016	$	3,562,119

See accompanying unaudited Notes to Condensed Consolidated Financial Statements.

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AptarGroup, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


In thousands

Three Months Ended	AptarGroup, Inc. Stockholders’ Equity
June 30, 2020 and 2019			Accumulated
			Other		Common				Capital in		Non-
	Retained		Comprehensive		Stock		Treasury		Excess of		Controlling		Total
	Earnings		(Loss) Income		Par Value		Stock		Par Value		Interest		Equity
Balance - March 31, 2019	$	1,413,453	$	(319,795)	$	676	$	(327,871)	$	700,933	$	318	$	1,467,714
Net income		73,915		—		—		—		—		6		73,921
Foreign currency translation adjustments		—		9,422		—		—		—		(8)		9,414
Changes in unrecognized pension gains (losses) and related amortization, net of tax		—		716		—		—		—		—		716
Changes in derivative gains (losses), net of tax		—		(479)		—		—		—		—		(479)
Stock awards and option exercises		—		—		7		14,587		42,399		—		56,993
Cash dividends declared on common stock		(22,761)		—		—		—		—		—		(22,761)
Treasury stock purchased		—		—		—		(4,096)		—		—		(4,096)
Balance - June 30, 2019	$	1,464,607	$	(310,136)	$	683	$	(317,380)	$	743,332	$	316	$	1,581,422

Balance - March 31, 2020	$	1,554,665	$	(381,058)	$	689	$	(372,573)	$	785,567	$	333	$	1,587,623
Net income		41,839		—		—		—		—		21		41,860
Foreign currency translation adjustments		—		19,095		—		—		—		1		19,096
Changes in unrecognized pension gains (losses) and related amortization, net of tax		—		1,440		—		—		—		—		1,440
Changes in derivative gains (losses), net of tax		—		(733)		—		—		—		—		(733)
Stock awards and option exercises		—		—		1		1,867		17,944		—		19,812
Cash dividends declared on common stock		(

Price	118.51	EPS	4
Shares	67	P/E	34
MCap	7,905	P/FCF	21
Net Debt	872	EBIT	342
TEV	8,777	TEV/EBIT	26
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-31
10-Q	2020-03-31	Filed 2020-05-01
10-K	2019-12-31	Filed 2020-02-24
10-Q	2019-09-30	Filed 2019-11-01
10-Q	2019-06-30	Filed 2019-08-01
10-Q	2019-03-31	Filed 2019-05-01
10-K	2018-12-31	Filed 2019-02-21
10-Q	2018-09-30	Filed 2018-11-05
10-Q	2018-06-30	Filed 2018-08-01
10-Q	2018-03-31	Filed 2018-05-03
10-K	2017-12-31	Filed 2018-02-26
10-Q	2017-09-30	Filed 2017-11-01
10-Q	2017-06-30	Filed 2017-08-02
10-Q	2017-03-31	Filed 2017-05-01
10-K	2016-12-31	Filed 2017-02-27
10-Q	2016-09-30	Filed 2016-11-04
10-Q	2016-06-30	Filed 2016-08-01
10-Q	2016-03-31	Filed 2016-05-03
10-K	2015-12-31	Filed 2016-02-25
10-Q	2015-09-30	Filed 2015-11-05
10-Q	2015-06-30	Filed 2015-07-31
10-Q	2015-03-31	Filed 2015-05-04
10-K	2014-12-31	Filed 2015-02-27
10-Q	2014-09-30	Filed 2014-11-06
10-Q	2014-06-30	Filed 2014-08-04
10-Q	2014-03-31	Filed 2014-05-05
10-K	2013-12-31	Filed 2014-02-28
10-Q	2013-09-30	Filed 2013-11-04
10-Q	2013-06-30	Filed 2013-08-05
10-Q	2013-03-31	Filed 2013-05-06
10-K	2012-12-31	Filed 2013-02-28
10-Q	2012-09-30	Filed 2012-11-02
10-Q	2012-06-30	Filed 2012-08-06
10-Q	2012-03-31	Filed 2012-05-08
10-K	2011-12-31	Filed 2012-02-24
10-Q	2011-09-30	Filed 2011-11-02
10-Q	2011-06-30	Filed 2011-08-03
10-Q	2011-03-31	Filed 2011-05-09
10-K	2010-12-31	Filed 2011-02-25
10-Q	2010-09-30	Filed 2010-11-03
10-Q	2010-06-30	Filed 2010-08-04
10-Q	2010-03-31	Filed 2010-05-04
10-K	2009-12-31	Filed 2010-02-26

8-K	2020-07-30	Earnings, Exhibits
8-K	2020-05-06
8-K	2020-04-30
8-K	2020-02-20
8-K	2019-10-31
8-K	2019-07-31
8-K	2019-05-01
8-K	2019-04-30
8-K	2019-02-20
8-K	2018-11-01
8-K	2018-07-26
8-K	2018-06-12
8-K	2018-05-02
8-K	2018-04-26
8-K	2018-02-12
8-K	2018-02-08
8-K	2018-01-18

EX-3.1	atr-20200630xex3d1.htm
EX-31.1	atr-20200630xex31d1.htm
EX-31.2	atr-20200630xex31d2.htm
EX-32.1	atr-20200630xex32d1.htm
EX-32.2	atr-20200630xex32d2.htm

ATR 10Q Quarterly Report

AptarGroup Earnings 2020-06-30