Silgan Holdings Inc. (Nasdaq:SLGN), a leading supplier of rigid packaging for consumer goods products, today reported third quarter 2017 net income of $72.4 million, or $0.65 per diluted share, as compared to third quarter 2016 net income of $69.8 million, or $0.57 per diluted share.
“We reported adjusted net income per diluted share of $0.66 for the third quarter of 2017, an increase of 8 percent over the prior year period,” said Tony Allott, President and CEO. “We continue to be very pleased with the results of the recently acquired Dispensing Systems operations and its progress toward achieving the expected synergies. Our plastic container business continues to benefit from our footprint optimization program and to deliver results in line with expectations,” continued Mr. Allott. “Our metal container business experienced volume declines as compared to the prior year primarily as a result of lower pack volumes which were unfavorably impacted by inclement weather in the western U.S. growing regions and lower soup volumes. Our closures business was negatively impacted by cooler weather conditions throughout the summer which resulted in lower single-serve beverage volumes as compared to record volumes in the prior year period. Additionally, we were negatively impacted by hurricanes in the quarter as each of our businesses experienced temporary plant shutdowns and logistical disruptions. Based upon our performance to date, we are maintaining our guidance and narrowing the range for our full year 2017 earnings estimate of adjusted net income per diluted share to $1.62 to $1.67,” concluded Mr. Allott.
Adjusted net income per diluted share was $0.66 for the third quarter of 2017, after adjustments increasing net income per diluted share by $0.01. Adjusted net income per diluted share was $0.61 for the third quarter of 2016, after adjustments increasing net income per diluted share by $0.04. 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 Tables A and B at the back of this press release.
All per share amounts for prior periods have been adjusted for the two-for-one stock split that occurred on May 26, 2017.
Net sales for the third quarter of 2017 were $1.27 billion, an increase of $127.3 million, or 11.2 percent, as compared to $1.14 billion in 2016. This increase was the result of higher net sales in the closures business due to the acquisition of the Dispensing Systems operations in April 2017 as well as in the plastic container business, partially offset by lower net sales in the metal container business.
Income from operations for the third quarter of 2017 was $138.6 million, an increase of $16.2 million, or 13.2 percent, as compared to $122.4 million for the third quarter of 2016, and operating margin increased to 10.9 percent from 10.7 percent for the same periods. The increase in income from operations was the result of higher income from operations in the closures business due to the benefit from the acquisition of Dispensing Systems as well as in the plastic container business, partially offset by lower income from operations in the metal container business. Rationalization charges were $0.6 million and $7.8 million in the third quarters of 2017 and 2016, respectively.
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