Silgan Announces Record 2021 Earnings And Cash Generation

Highlights
*Reported cash from operations of $556.8 million
*Free cash flow increased 22% over 2020 to a record $466.1 million, representing a free cash flow yield of 10% based on year end stock price
*Record full year volumes in the Dispensing and Specialty Closures segment, with a 9% increase over prior year record volumes
*Record full year volumes in the Metal Container segment, with a further 4% increase on top of the 14% growth in 2020
*Completed the strategic acquisitions of Gateway, Unicep and Easytech *Issued the Company’s inaugural sustainability report
*Returned to year end target leverage ratio after completing three acquisitions in 2021
*Continued to improve the Company’s capital structure with the issuance of $500 million of 1.4% Senior Secured Notes and a favorable extension of the senior secured credit facility
*Increased cash dividend for the seventeenth year in a row

Silgan Holdings Inc. (Nasdaq:SLGN), a leading supplier of sustainable rigid packaging solutions for consumer goods products, today reported full year 2021 net income of $359.1 million, or $3.23 per diluted share, as compared to full year 2020 net income of $308.7 million, or $2.77 per diluted share. Adjusted net income per diluted share was a record $3.40 for the full year of 2021, after adjustments increasing net income per diluted share by $0.17. Adjusted net income per diluted share was $3.06 for the full year of 2020, after adjustments increasing net income per diluted share by $0.29. 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.

“The Silgan team delivered another year of record performance and double digit earnings growth and continued to demonstrate the power of the Company’s portfolio of essential products, disciplined capital allocation model, strong operational performance and relentless focus on meeting the unique requirements of our customers,” said Adam Greenlee, President and CEO. “For the full year of 2021, the Company delivered record adjusted earnings per diluted share of $3.40, an 11 percent increase over the prior year record in 2020, and record free cash flow of $466.1 million. The Silgan team continued to successfully navigate the ongoing challenges related to the global pandemic, as demand remained at high levels for our Dispensing and Specialty Closures and Metal Container products with new record volume levels in both segments. Strong operational performance continued to help offset unprecedented inflation and on-going supply chain and labor challenges, which lessened through the fourth quarter but have yet to normalize,” continued Mr. Greenlee. “Looking forward to 2022, we expect further improvements in the supply chain and labor issues as well as a more stable resin environment. In addition, our teams are diligently working towards the successful integration of the three acquisitions completed in 2021, which are expected to provide additional significant earnings growth in 2022. Therefore, we estimate adjusted earnings per share in 2022 in the range of $3.80 to $4.00, which represents a 15 percent increase at the midpoint over record 2021 levels. Our free cash flow estimate for 2022 is estimated at approximately $350 million, as we anticipate an increase in working capital primarily related to significant metal inflation in 2022, increased capital expenditures for growth investment opportunities with core customers and higher cash taxes which will more than offset strong earnings growth,” concluded Mr. Greenlee.

The Company reported net cash provided by operating activities of $556.8 million in 2021 as compared to $602.5 million in 2020. Free cash flow increased $82.6 million to $466.1 million in 2021 as compared to $383.5 million in 2020 due primarily to higher net income, working capital benefits and the utilization of tax benefits from the recent acquisitions. 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 in 2021 were $5.68 billion, an increase of $755.2 million, or 15.3 percent, as compared to $4.92 billion in 2020. This increase was the result of higher net sales in all segments.

Income before interest and income taxes for 2021 was $576.1 million, an increase of $63.7 million, or 12.4 percent, as compared to $512.4 million for 2020, while margins decreased to 10.1 percent from 10.4 percent over the same periods. The increase in income before interest and income taxes was primarily due to higher income in each of the segments, lower corporate expenses principally due to lower acquisition related costs and lower rationalization charges. Costs attributed to announced acquisitions were $5.0 million and $19.3 million in 2021 and 2020, respectively.
more at: https://silganholdingsinc.gcs-web.com/news-releases/news-release-details/silgan-announces-record-2021-earnings-and-cash-generation

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