Highlights
*Strong volume trends continued throughout the year, with fourth quarter year-over-year volume increases of 15 percent in each of metal containers and closures and 8 percent in plastic containers
*Reported record revenue of $4.9 billion, with all-time high volumes achieved in each business segment
*Delivered record earnings per diluted share of $2.77, an increase of 59% over 2019
*Achieved record adjusted earnings per diluted share of $3.06, an increase of 42% over the previous record in 2019
*Reported cash from operations of $602.5 million, an increase of 19% over 2019
*Generated record free cash flow of $383.5 million, representing a free cash flow yield of nearly 10% based on year end stock price
*Completed the acquisition and integration of the dispensing operations of Albéa Group, greatly expanding fragrance, foam and airless pump capabilities
*Supported customer and industry efforts to further communicate the benefits of metal packaging for food, including sustainability, low cost, health and convenience
*Initiated commercial supply for a major pet food customer expansion in Eastern Europe
*Managed several significant new business wins in the plastic container business, which are expected to generate further volume growth in 2021 and beyond
*Initiated several capacity expansion projects for dispensing triggers and pumps to support significant customer growth in health and hygiene product offerings and increased need for more local production
*Increased cash dividend for the sixteenth year in a row
*Attained target leverage ratio seven months post-acquisition – leaving the Company well-positioned to take advantage of future cash deployment opportunities
Silgan Holdings Inc. (Nasdaq:SLGN), a leading supplier of sustainable rigid packaging solutions for consumer goods products, today reported full year 2020 net income of $308.7 million, or $2.77 per diluted share, as compared to full year 2019 net income of $193.8 million, or $1.74 per diluted share. Adjusted net income per diluted share was a record $3.06 for the full year of 2020, after adjustments increasing net income per diluted share by $0.29. Adjusted net income per diluted share was $2.16 for the full year of 2019, after adjustments increasing net income per diluted share by $0.42. 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.
“While 2020 presented us all with so many challenges, it also provided the Company with the opportunity to showcase the essential nature of our products, the strength and commitment of our team and the power of our performance-based culture, as the Company delivered record adjusted net income per diluted share of $3.06, a 41.7 percent increase over prior year adjusted earnings, and record free cash flow of $383.5 million,” said Tony Allott, Chairman and CEO. “Strong demand for our shelf-stable metal food packaging and our health and hygiene products sustained throughout the year, leading us to expect continued strong volumes in 2021. Therefore, we estimate adjusted net income per diluted share for 2021 for the Company to be in a range of $3.30 to $3.45, a 10.3 percent improvement over the record prior year period at the midpoint of this range. We also expect to continue to generate significant free cash flow of approximately $380 million in 2021, making acquisitions or other value creating uses of our cash an additional near-term opportunity,” concluded Mr. Allott.
The Company reported net cash provided by operating activities of $602.5 million in 2020 as compared to $507.3 million in 2019. Free cash flow increased $111.8 million to $383.5 million in 2020 as compared to $271.7 million in 2019 due primarily to higher net income, cash receipts generated from strong sales and certain deferred tax payments. The Company is providing a reconciliation in Table C of this press release of net cash provided by operating activities to “free cash flow,” a Non-GAAP financial measure used by the Company which adjusts net cash provided by operating activities for certain items.
Net sales for the full year of 2020 were $4.92 billion, an increase of $432.0 million, or 9.6 percent, as compared to $4.49 billion in 2019. This increase was the result of higher net sales in all of the businesses.
Income before interest and income taxes for 2020 was $512.4 million, an increase of 42.5 percent or $152.9 million as compared to $359.5 million for 2019, and margins increased to 10.4 percent from 8.0 percent over the same periods. The increase in income before interest and income taxes was primarily the result of higher segment income in each of the businesses and lower rationalization charges in 2020, partially offset by higher corporate expenses primarily as a result of higher acquisition related costs and the plant employee Silgan Strong incentive payments made in the first quarter of 2020 as well as the $3.5 million charge for the purchase accounting write-up of inventory as a result of acquisitions completed in 2020. Rationalization charges were $16.0 million and $56.3 million in 2020 and 2019, respectively. Costs attributed to announced acquisitions were $19.3 million and $1.8 million for 2020 and 2019, respectively.
Interest and other debt expense before loss on early extinguishment of debt for 2020 was $103.8 million, a decrease of $1.9 million as compared to 2019. This decrease was primarily due to lower weighted average interest rates, partially offset by higher average outstanding borrowings primarily related to the acquisition of the dispensing operations of Albéa and additional revolving loan borrowings outstanding during the first half of 2020 principally to hold cash and cash equivalents to ensure liquidity against potential credit market disruptions as a result of the COVID-19 pandemic. Weighted average interest rates were lower during 2020 due to lower variable market rates and the redemption of all outstanding 5½% Senior Notes due 2022 in the third quarter of 2019. In the first quarter of 2020, the Company recognized a loss on early extinguishment of debt of $1.5 million in conjunction with the prepayment of term loans under the senior secured credit facility. Loss on early extinguishment of debt of $1.7 million in 2019 was the result of the redemption of all outstanding 5½% Senior Notes in August 2019.
The effective tax rates for 2020 and 2019 were 24.2 percent and 23.1 percent, respectively. The effective tax rate in 2019 was favorably impacted by the resolution of a prior year tax audit and the timing of certain tax deductions.
more detail at: https://silganholdingsinc.gcs-web.com/news-releases/news-release-details/silgan-announces-record-2020-earnings-and-cash-generation