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AptarGroup Inc. Reports Operating Results (10-Q)

August 06, 2012 | About:
10qk

10qk

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AptarGroup Inc. (ATR) filed Quarterly Report for the period ended 2012-06-30.

Aptargroup, Inc. has a market cap of $3.33 billion; its shares were traded at around $50.15 with a P/E ratio of 19.3 and P/S ratio of 1.4. The dividend yield of Aptargroup, Inc. stocks is 1.8%. Aptargroup, Inc. had an annual average earning growth of 10.5% over the past 10 years. GuruFocus rated Aptargroup, Inc. the business predictability rank of 4.5-star.

Highlight of Business Operations:

We reported net sales of $577.5 million for the quarter ended June 30, 2012, 6% below second quarter 2011 reported net sales of $614.9 million. Excluding changes in foreign currency rates, sales increased by 2% in the second quarter of 2012 compared to the second quarter of 2011. The average U.S. dollar exchange rate strengthened relative to the Euro and other foreign currencies, such as the Brazilian Real, Swiss Franc and British Pound, in the second quarter of 2012 compared to the second quarter of 2011, and as a result, changes in exchange rates had a negative impact of 8% on our reported sales growth. Excluding changes in foreign currency rates, custom tooling sales decreased $2.1 million and acquisitions contributed $2.3 million to net sales in the second quarter of 2012.

Operating income decreased approximately $13.1 million in the second quarter of 2012 to $67.1 million compared to $80.2 million in the same period in the prior year. Excluding changes in currency rates, operating income decreased by approximately $6.4 million in the quarter. Stelmi transaction costs of approximately $5.5 million and slightly higher cost of sales were the primary reasons for the decrease in operating income. Operating income as a percentage of net sales decreased to 11.6% in the second quarter of 2012 compared to 13.0% for the same period in the prior year mainly due to the negative factors impacting cost of sales and SG&A noted above.

Operating income decreased approximately $12.6 million in the first half of 2012 to $137.4 million compared to $150.0 million in the same period in the prior year. Excluding changes in currency rates, operating income decreased by approximately $3.4 million in the first half of 2012. The decrease is primarily due to the same reasons mentioned above for the second quarter results. Operating income as a percentage of sales decreased to 11.7% in the first half of 2012 compared to 12.6% for the same period in the prior year.

Net sales for the quarter ended June 30, 2012 increased approximately 2% to $75.2 million compared to $73.5 million in the second quarter of the prior year. Sales, excluding changes in foreign currency rates, increased 6%. A reduction in tooling sales in the second quarter of 2012 was more than offset by increased product sales of more than 10%, excluding changes in foreign currency. Excluding foreign currency changes, sales to the food market decreased 10% due to lower tooling sales compared to the second quarter of 2011. Sales to the beverage market increased approximately 39% due to significant closure sales growth in Asia.

Segment income in the second quarter of 2012 decreased approximately 9% to $7.9 million compared to $8.6 million during the same period in the prior year. Increased research and development and selling costs of approximately $800 thousand along with $1.3 million of additional costs related to our new Lincolnton, North Carolina facility offset the additional margin from our increased product sales and the positive impact from the timing of reduced resin cost pass throughs of approximately $900 thousand.

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