Silgan Holdings Inc. Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2016; Provides Earnings Guidance for the First Quarter of 2017 and Full Year 2017
January 31, 2017 at 05:00 pm
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Silgan Holdings Inc. reported unaudited consolidated earnings results for the fourth quarter and full year ended December 31, 2016. For the quarter, the company reported net sales of $805.9 million compared to $829.6 million a year ago. This decrease was primarily due to the pass through of lower raw material and other costs in the metal container and closures businesses, a less favorable mix of products sold in the metal and plastic container businesses and the impact of unfavorable foreign currency translation in the metal container and closures businesses, partially offset by an increase in unit volumes of approximately 1% in each of the metal and plastic container businesses. Income from operations was $52.2 million compared to $52.5 million a year ago. Income from operations declined primarily due to a decrease in the metal container business which was unfavorably impacted by a reduction in inventories in the current year as compared to an increase in inventories in the prior year, higher rationalization charges, a less favorable mix of products sold and the contractual pass through to customers of indexed deflation. Income before income taxes was $35.1 million compared to $36.0 million a year ago. Net income was $23.7 million or $0.41 per basic and diluted share compared to $26.5 million or $0.44 per basic and diluted share a year ago. Adjusted net income per diluted share was $0.48 compared to $0.48 a year ago.
For the year, the company reported net sales of $3,612.9 million compared to $3,764.0 million a year ago. This decrease was the result of lower net sales in all of businesses, each of which was unfavorably impacted by the pass through of lower raw material costs. Income from operations was $299.7 million compared to $319.8 million a year ago. Income before income taxes was $231.9 million compared to $252.9 million a year ago. Net income was $153.4 million or $2.55 per diluted share compared to $172.4 million or $2.81 per diluted share a year ago. Net cash provided by operating activities was $394.6 million compared to $335.7 million a year ago. Capital expenditures were $191.9 million compared to $237.3 million a year ago. Adjusted net income per diluted share was $2.77 compared to $2.97 a year ago. The decrease in income from operations was the result of a decrease in income from operations in the metal and plastic container businesses, partially offset by an increase in income from operations in the closures business. The company generated free cash flow of $179.9 million or $2.99 per share versus $117.4 million or $1.91 per share in the prior year. Operating income decreased $2.6 million to $5.2 million for the year, largely attributable to start-up costs for the new manufacturing facilities, lower unit volumes, the favorable impact in the prior year from the lagged pass-through of decreases in resin costs and foreign currency transaction gains in the prior year. These reductions were partially offset by lower rationalization charges and better manufacturing performance late in the year.
The company currently estimates that its adjusted net income per diluted share for the full year 2017 will be in the range of $3.15 to $3.35, as compared to adjusted net income per diluted share for the full year of 2016 of $2.77. The company expects interest expense to increase in 2017 due to higher weighted average interest rates and higher average outstanding debt balances due to the shares repurchased in the tender offer completed in the fourth quarter of 2016. The company expects the effective tax rate for 2017 to be approximately 33.5% as compared to 33.9% in 2016. The company currently estimates that free cash flow in 2017 will be approximately $220 million as compared to $179.9 million in 2016.
For the first quarter of 2017, the company is providing an estimate of adjusted net income per diluted share in the range of $0.48 to $0.58.
Silgan Holdings Inc. is a manufacturer of sustainable rigid packaging solutions for essential consumer goods products. The Companyâs segments include dispensing and specialty closures, metal containers and custom containers. The dispensing and specialty closures segment manufactures and sells dispensing systems and specialty closures for fragrance and beauty, food, beverage, personal and health care, home care and lawn and garden products. The metal containers segment is engaged in the manufacture and sale of steel and aluminum containers for pet and human food and general line products. The custom containers segment manufactures and sells custom designed plastic containers for pet and human food, consumer health and pharmaceutical, personal care, home care, lawn and garden and automotive products. Its products are used for a variety of end markets, and it operates over 107 manufacturing plants in North America, Europe, Asia and South America.
Silgan Holdings Inc. Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2016; Provides Earnings Guidance for the First Quarter of 2017 and Full Year 2017