Quick10K

Silgan Holdings

Price	29.77		EPS	2
Shares	112		P/E	17
MCap	3,321		P/FCF	-1,377
Net Debt	2,534		EBIT	301
TEV	5,855		TEV/EBIT	19
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-03-31	Filed 2020-05-08 Print
10-K	2019-12-31	Filed 2020-03-02 Print
10-Q	2019-09-30	Filed 2019-11-08 Print
10-Q	2019-06-30	Filed 2019-08-08 Print
10-Q	2019-03-31	Filed 2019-05-08 Print
10-K	2018-12-31	Filed 2019-02-28 Print
10-Q	2018-09-30	Filed 2018-11-08 Print
10-Q	2018-06-30	Filed 2018-08-08 Print
10-Q	2018-03-31	Filed 2018-05-04 Print
10-K	2017-12-31	Filed 2018-03-01 Print
10-Q	2017-09-30	Filed 2017-11-09 Print
10-Q	2017-06-30	Filed 2017-08-09 Print
10-Q	2017-03-31	Filed 2017-05-05 Print
10-K	2016-12-31	Filed 2017-03-01 Print
10-Q	2016-09-30	Filed 2016-11-08 Print
10-Q	2016-06-30	Filed 2016-08-03 Print
10-Q	2016-03-31	Filed 2016-05-06 Print
10-K	2015-12-31	Filed 2016-02-25 Print
10-Q	2015-09-30	Filed 2015-11-06 Print
10-Q	2015-06-30	Filed 2015-08-07 Print
10-Q	2015-03-31	Filed 2015-05-08 Print
10-K	2014-12-31	Filed 2015-02-27 Print
10-Q	2014-09-30	Filed 2014-11-07 Print
10-Q	2014-06-30	Filed 2014-08-08 Print
10-Q	2014-03-31	Filed 2014-05-09 Print
10-K	2013-12-31	Filed 2014-02-28 Print
10-Q	2013-09-30	Filed 2013-11-08 Print
10-Q	2013-06-30	Filed 2013-08-08 Print
10-Q	2013-03-31	Filed 2013-05-10 Print
10-K	2012-12-31	Filed 2013-02-28 Print
10-Q	2012-09-30	Filed 2012-11-09 Print
10-Q	2012-06-30	Filed 2012-08-09 Print
10-Q	2012-03-31	Filed 2012-05-10 Print
10-K	2011-12-31	Filed 2012-02-29 Print
10-Q	2011-09-30	Filed 2011-11-09 Print
10-Q	2011-06-30	Filed 2011-08-09 Print
10-Q	2011-03-31	Filed 2011-05-10 Print
10-K	2010-12-31	Filed 2011-02-28 Print
10-Q	2010-09-30	Filed 2010-11-05 Print
10-Q	2010-08-02	Filed 2010-08-09 Print
10-Q	2010-03-31	Filed 2010-05-10 Print
10-K	2009-12-31	Filed 2010-03-01 Print

8-K	2020-07-22	Earnings, Exhibits
8-K	2020-07-15	Regulation FD, Exhibits
8-K	2020-06-08
8-K	2020-06-01
8-K	2020-05-06
8-K	2020-04-22
8-K	2020-04-21
8-K	2020-04-17
8-K	2020-02-27
8-K	2020-02-26
8-K	2020-02-19
8-K	2020-02-19
8-K	2020-02-04
8-K	2020-01-28
8-K	2020-01-27
8-K	2020-01-27
8-K	2019-11-12
8-K	2019-11-06
8-K	2019-11-04
8-K	2019-11-04
8-K	2019-10-23
8-K	2019-10-01
8-K	2019-08-07
8-K	2019-07-24
8-K	2019-07-01
8-K	2019-07-01
8-K	2019-06-12
8-K	2019-06-11
8-K	2019-06-04
8-K	2019-05-08
8-K	2019-05-07
8-K	2019-04-24
8-K	2019-04-15
8-K	2019-04-01
8-K	2019-02-27
8-K	2019-01-29
8-K	2018-11-08
8-K	2018-10-24
8-K	2018-08-07
8-K	2018-08-06
8-K	2018-07-25
8-K	2018-06-11
8-K	2018-05-30
8-K	2018-05-03
8-K	2018-04-25
8-K	2018-03-16
8-K	2018-02-28
8-K	2018-01-30
8-K	2018-01-24

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

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Part I. Financial Information

Item 1. Financial Statements

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Note 1.               Significant Accounting Policies

Basis of Presentation. The accompanying unaudited condensed consolidated financial statements of Silgan Holdings Inc., or Silgan, have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In the opinion of management, the accompanying financial statements include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation.  The results of operations for any interim period are not necessarily indicative of the results of operations for the full year.

The Condensed Consolidated Balance Sheet at December 31, 2019 has been derived from our audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

You should read the accompanying condensed consolidated financial statements in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019.

Recently Adopted Accounting Pronouncements. In June 2016, the Financial Accounting Standards Board, or FASB, issued an accounting standards update, or ASU, that amends the guidance on the accounting for credit losses on financial instruments. This new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables. We adopted this new standard on January 1, 2020 using the transition method, which allowed us to recognize the effects of applying this standard as a cumulative effect to retained earnings as of January 1, 2020. As a result of the adoption of this standard, we reduced retained earnings by $0.7 million. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows.

Note 2.               Revenue

The following tables present our revenues disaggregated by reportable business segment and geography as they best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Revenues by business segment for the three months ended March 31 were as follows:

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												2020						2019
												(Dollars in thousands)
Metal containers												$	508,519					$	507,062
Closures												357,151						356,199
Plastic containers												164,714						163,870
												$	1,030,384					$	1,027,131

Revenues by geography for the three months ended March 31 were as follows:

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												2020						2019
												(Dollars in thousands)
North America												$	822,405					$	810,741
Europe and other												207,979						216,390
												$	1,030,384					$	1,027,131

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Note 3.               Acquisition

Note 4.               Rationalization Charges

We continually evaluate cost reduction opportunities across each of our businesses, including rationalizations of our existing facilities through plant closings and downsizings. We use a disciplined approach to identify opportunities that generate attractive cash returns. Rationalization charges by business segment for the three months ended March 31 were as follows:

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												2020						2019
												(Dollars in thousands)
Metal containers												$	1,963					$	222
Closures												742						5,660
Plastic containers												94						201
												$	2,799					$	6,083

Activity in reserves for our rationalization plans were as follows:

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						Employee Severance and Benefits						Plant Exit Costs						Non-Cash Asset Write-Down						Total
						(Dollars in thousands)
Balance at December 31, 2019						$	42,815					$	898					$	—					$	43,713
Charged to expense						1,362						1,242						195						2,799
Utilized and currency translation						(2,122)						(1,331)						(195)						(3,648)
Balance at March 31, 2020						$	42,055					$	809					$	—					$	42,864

Rationalization reserves as of March 31, 2020 were recorded in our Condensed Consolidated Balance Sheets as accrued liabilities of $4.7 million and other liabilities of $38.2 million. Exclusive of the footprint optimization plan for our metal container business and our resulting withdrawal from the Central States, Southeast and Southwest Areas Pension Plan, or the Central States Pension Plan, announced in 2019, remaining expenses for our rationalization plans of $1.9 million are expected primarily through 2020 and remaining cash expenditures for our rationalization plans of $3.6 million are expected through 2023. Remaining expenses for the accretion of interest for the withdrawal liability related to the Central States Pension Plan are expected to average approximately $1.1 million per year and be recognized annually for the next twenty years, and remaining cash expenditures for the withdrawal liability related to the Central States Pension Plan are expected to be approximately $3.1 million annually for the next twenty years, beginning in 2020.

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Note 5.               Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is reported in our Condensed Consolidated Statements of Stockholders’ Equity.  Amounts included in accumulated other comprehensive loss, net of tax, were as follows:

 

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			Unrecognized Net Defined Benefit Plan Costs						Change in Fair Value of Derivatives						Foreign Currency Translation						Total
			(Dollars in thousands)
Balance at December 31, 2019			$	(139,102)					$	(3,182)					$	(117,458)					$	(259,742)
Other comprehensive loss before reclassifications			(872)						(2,844)						(36,439)						(40,155)
Amounts reclassified from accumulated other     comprehensive loss			1,811						389						—						2,200
Other comprehensive loss			939						(2,455)						(36,439)						(37,955)
Balance at March 31, 2020			$	(138,163)					$	(5,637)					$	(153,897)					$	(297,697)

 

The amounts reclassified to earnings from the unrecognized net defined benefit plan costs component of accumulated other comprehensive loss for the three months ended March 31, 2020, were net (losses) of $(2.4) million, excluding an income tax benefit of $0.6 million. These net (losses) consisted of amortization of net actuarial (losses) of $(2.8) million and amortization of net prior service credit of $0.4 million, respectively. Amortization of net actuarial losses and net prior service credit was recorded in other pension and postretirement income in our Condensed Consolidated Statements of Income. See Note 10 for further information.

The amounts reclassified to earnings from the change in fair value of derivatives component of accumulated other comprehensive loss for the three months ended March 31, 2020 were not significant.

Other comprehensive loss before reclassifications related to foreign currency translation for the three months ended March 31, 2020, consisted of (i) foreign currency (losses) related to translation of quarter end financial statements of foreign subsidiaries utilizing a functional currency other than the U.S. dollar of $(32.9) million, (ii) foreign currency (losses) related to intra-entity foreign currency transactions that are of a long-term investment nature of $(3.0) million, and (iii) foreign currency (losses) related to our net investment hedges of $(0.7) million, excluding an income tax benefit of $0.2 million. See Note 8 for further discussion.

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Note 6.               Inventories

Inventories consisted of the following: 

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			March 31, 2020						March 31, 2019						Dec. 31, 2019
			(Dollars in thousands)
Raw materials			$	261,058					$	244,859					$	286,953
Work-in-process			148,034						135,685						134,417
Finished goods			432,085						418,702						355,337
Other			13,126						12,850						12,793
			854,303						812,096						789,500
Adjustment to value inventory at cost on the LIFO method			(156,495)						(125,883)						(156,495)
			$	697,808					$	686,213					$	633,005

Note 7.               Long-Term Debt

Long-term debt consisted of the following:

 

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			March 31, 2020						March 31, 2019						Dec. 31, 2019
			(Dollars in thousands)
Bank debt
Bank revolving loans			$	827,000					$	506,000					$	—
U.S. term loans			—						800,000						760,000
Canadian term loans			—						15,825						4,703
Other foreign bank revolving and term loans			29,239						30,906						31,127
Total bank debt			856,239						1,352,731						795,830
5½% Senior Notes			—						300,000						—
4¾% Senior Notes			300,000						300,000						300,000
3¼% Senior Notes			713,490						729,170						729,755
4⅛% Senior Notes			600,000						—						400,000
2¼% Senior Notes			548,839						—						—
Finance leases			32,582						22,167						33,288
Total debt - principal			3,051,150						2,704,068						2,258,873
Less unamortized debt issuance costs and debt discount			21,926						12,492						14,452
Total debt			3,029,224						2,691,576						2,244,421
Less current portion			854,653						578,001						29,813
			$	2,174,571					$	2,113,575					$	2,214,608

At March 31, 2020, the current portion of long-term debt consisted of $827.0 million of bank revolving loans under the Credit Agreement, $26.0 million of other foreign bank revolving and term loans and $1.7 million of finance leases.

On February 26, 2020, we issued (i) an additional $200 million aggregate principal amount of our 4⅛% Senior Notes due 2028, or the 4⅛% Notes, at 99.5 percent of their principal amount, plus accrued and unpaid interest from November 12, 2019, and €500 million aggregate principal amount of our 2¼% Senior Notes due 2028, or the 2¼% Notes, at 100 percent of their principal amount. We used the net proceeds from these issuances and revolving loan borrowings under the Credit Agreement to

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prepay all of our outstanding U.S. A term loans under the Credit Agreement. As a result of this prepayment, we recorded a pre-tax charge for the loss on early extinguishment of debt of $1.5 million during the first quarter of 2020 for the write-off of unamortized debt issuance costs.

2¼% SENIOR NOTES

The 2¼% Notes are general unsecured obligations of Silgan, ranking equal in right of payment with our existing and future unsecured unsubordinated indebtedness, including our 4¾% Senior Notes due 2025, or the 4¾% Notes, our 3¼% Senior Notes due 2025, or the 3¼% Notes, and the 4⅛% Notes, and ahead of our existing and future subordinated debt, if any. The 2¼% Notes are effectively subordinated to Silgan’s secured debt to the extent of the assets securing such debt and structurally subordinated to all obligations of subsidiaries of Silgan.

The 2¼% Notes will mature on June 1, 2028. Interest on the 2¼% Notes will be payable semi-annually in cash on January 15 and July 15 of each year, beginning on July 15, 2020. The 2¼% Notes were issued pursuant to an indenture by and among Silgan, U.S. Bank National Association, as trustee, Elavon Financial Services DAC, UK Branch, as paying agent, and Elavon Financial Services DAC, as registrar and transfer agent, which indenture contains covenants that are generally less restrictive than those in the Credit Agreement and substantially similar to the covenants in the indenture for the 4¾% Notes and the 3¼% Notes and the indenture for the 4⅛% Notes.

The 2¼% Notes are redeemable, at our option, in whole or in part, at any time after March 1, 2023, initially at 101.125 percent of their principal amount, plus accrued and unpaid interest to the redemption date, declining ratably to 100 percent of their principal amount, plus accrued and unpaid interest to the redemption date, on or after March 1, 2025.

In addition, prior to March 1, 2023, we may redeem up to 35 percent of the aggregate principal amount of the 2¼% Notes with the proceeds of certain equity offerings at a redemption price of 102.25 percent of their principal amount, plus accrued and unpaid interest to the date of redemption. We may also redeem the 2¼% Notes, in whole or in part, prior to March 1, 2023 at a redemption price equal to 100 percent of their principal amount plus a make-whole premium as provided in the indenture for the 2¼% Notes, together with accrued and unpaid interest to the date of redemption. We will be required to make an offer to repurchase the 2¼% Notes at a repurchase price equal to 101 percent of their principal amount, plus accrued and unpaid interest to the date of repurchase, upon the occurrence of a change of control repurchase event as provided in the indenture for the 2¼% Notes.

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Note 8.               Financial Instruments

The financial instruments recorded in our Condensed Consolidated Balance Sheets include cash and cash equivalents, trade accounts receivable, trade accounts payable, debt obligations and swap agreements.  Due to their short-term maturity, the carrying amounts of trade accounts receivable and trade accounts payable approximate their fair market values.  The following table summarizes the carrying amounts and estimated fair values of our other financial instruments at March 31, 2020:

Copy History

			Carrying Amount						Fair Value
			(Dollars in thousands)
Assets:
Cash and cash equivalents			$	614,846					$	614,846
Liabilities:
Bank debt			$	856,239					$	856,239
4¾% Notes			300,000						289,500
3¼% Notes			713,490						699,263
4⅛% Notes			599,009						553,500