Silgan (SLGN) - 2025 Q1 - Quarterly Report

Part I. Financial Information Item 1. Financial Statements This section presents Silgan Holdings Inc.'s unaudited condensed consolidated financial statements for Q1 2025, detailing balance sheets, income, cash flows, and equity with explanatory notes Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $8.77 billion from $8.58 billion at year-end 2024, driven by higher trade accounts receivable and inventories, while total stockholders' equity grew to $2.08 billion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | Dec. 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | $353,030 | $822,854 | $308,641 | | Trade accounts receivable, net | $1,012,790 | $594,279 | $946,051 | | Inventories | $1,055,281 | $928,056 | $957,240 | | Total current assets | $2,597,470 | $2,522,683 | $2,376,371 | | Goodwill | $2,373,376 | $2,316,031 | $1,997,285 | | Total assets | $8,767,975 | $8,584,668 | $7,574,255 | | Liabilities & Equity | | | | | Total current liabilities | $2,285,331 | $2,247,532 | $2,289,477 | | Long-term debt | $3,483,472 | $3,419,921 | $2,534,504 | | Total stockholders' equity | $2,083,344 | $1,989,581 | $1,899,846 | Condensed Consolidated Statements of Income For the first quarter of 2025, net sales increased by 11.4% year-over-year to $1.47 billion, with net income rising to $68.0 million from $55.2 million in the prior-year period Consolidated Income Statement (Three months ended March 31, in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $1,466,661 | $1,317,038 | +11.4% | | Gross profit | $270,403 | $223,479 | +21.0% | | Income before interest and income taxes | $130,544 | $111,719 | +16.8% | | Net income | $67,962 | $55,164 | +23.2% | | Diluted net income per share | $0.63 | $0.52 | +21.2% | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $683.4 million for Q1 2025, an increase from $547.8 million in Q1 2024, primarily due to changes in working capital Consolidated Cash Flows (Three months ended March 31, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) operating activities | $(683,401) | $(547,810) | | Net cash (used in) investing activities | $(82,472) | $(72,462) | | Net cash provided by financing activities | $282,996 | $292,676 | | Net (decrease) in cash and cash equivalents | $(469,824) | $(334,282) | | Cash and cash equivalents at end of period | $353,030 | $308,641 | Notes to Condensed Consolidated Financial Statements These notes detail significant accounting policies, debt, financial instruments, and segment performance, including the €650.0 million Senior Notes repayment and supply chain finance program Revenue by Segment (Three months ended March 31, in thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Dispensing and Specialty Closures | $671,103 | $535,920 | | Metal Containers | $628,427 | $617,129 | | Custom Containers | $167,131 | $163,989 | | Total | $1,466,661 | $1,317,038 | - On March 15, 2025, the company repaid all €650.0 million of its outstanding 3¼% Senior Notes due 2025, funding the repayment with Euro revolving loan borrowings and cash on hand[29] - The company utilizes a supply chain finance (SCF) program. As of March 31, 2025, suppliers' invoices included in this program amounted to $262.9 million, which are recorded in accounts payable[42] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial results, highlighting 11.4% net sales growth to $1.47 billion, segment performance, liquidity, and capital resources - Consolidated net sales for Q1 2025 increased by $149.7 million (11.4%) to $1.47 billion compared to Q1 2024, primarily due to the Weener Packaging acquisition, higher organic volumes, and raw material cost pass-through[63] - Income before interest and income taxes rose by $18.8 million to $130.5 million in Q1 2025, attributed to the Weener Packaging acquisition, improved manufacturing productivity, and higher organic volumes across all segments[66] - Interest expense increased by $4.3 million to $42.9 million in Q1 2025, mainly due to higher average borrowings related to the Weener Packaging acquisition[67] Segment Analysis All three segments reported year-over-year growth in net sales and Adjusted EBIT for Q1 2025, with Dispensing and Specialty Closures seeing the largest increase due to acquisition and organic volume growth Adjusted EBIT Reconciliation Summary (Q1 2025, in millions) | Segment | EBIT | Adjustments | Adjusted EBIT | | :--- | :--- | :--- | :--- | | Dispensing & Specialty Closures | $79.9 | $19.3 | $99.2 | | Metal Containers | $44.7 | $4.9 | $49.6 | | Custom Containers | $22.1 | $2.5 | $24.6 | | Corporate | $(16.2) | $1.1 | $(15.1) | | Total | $130.5 | $27.8 | $158.3 | Dispensing and Specialty Closures Segment Net sales for this segment increased by 25.2% to $671.1 million in Q1 2025, driven by the Weener Packaging acquisition and a 3% rise in organic unit volumes, with Adjusted EBIT growing to $99.2 million Dispensing and Specialty Closures Performance (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $671.1 | $535.9 | | Adjusted EBIT | $99.2 | $77.8 | | Adjusted EBIT margin | 14.8% | 14.5% | - The increase in net sales was primarily due to the inclusion of Weener Packaging, approximately 3% higher organic unit volumes, and a more favorable product mix, partially offset by unfavorable foreign currency translation of about $12.0 million[76] Metal Containers Segment The Metal Containers segment reported a 1.8% increase in net sales to $628.4 million, driven by a 4% rise in unit volumes, with Adjusted EBIT increasing to $49.6 million Metal Containers Performance (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $628.4 | $617.1 | | Adjusted EBIT | $49.6 | $45.0 | | Adjusted EBIT margin | 7.9% | 7.3% | - Unit volumes increased by approximately 4%, primarily due to higher demand in pet food and soup markets, which, along with improved manufacturing productivity, drove the increase in Adjusted EBIT[78][79] Custom Containers Segment Net sales in the Custom Containers segment grew by 2.0% to $167.2 million, supported by a 2% volume increase from new business awards, with Adjusted EBIT rising significantly to $24.6 million Custom Containers Performance (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $167.2 | $164.0 | | Adjusted EBIT | $24.6 | $20.2 | | Adjusted EBIT margin | 14.7% | 12.3% | - The increase in net sales was principally due to a volume increase of approximately 2% driven by new business awards, with Adjusted EBIT growth attributed to improved manufacturing productivity and cost performance[81][82] Capital Resources and Liquidity The company's primary liquidity sources are cash from operations and debt borrowings, with €650.0 million of notes repaid in Q1 2025 and $1.1 billion in revolving loans outstanding - On March 15, 2025, the company repaid all €650.0 million of its outstanding 3¼% Notes using Euro revolving loan borrowings and cash on hand[84] - As of March 31, 2025, the company had $1.1 billion of revolving loans outstanding and $398.2 million of availability under its Credit Agreement[87] - The company has seasonal working capital requirements that have historically averaged approximately $375 million, which are funded through revolving loans and cash[88] Quantitative and Qualitative Disclosures About Market Risk The company states that there have been no material changes to its primary market risks—interest rates, foreign currency exchange rates, and commodity prices—or its risk management policies since its 2024 Annual Report on Form 10-K - There has not been a material change to the company's interest rate risk, foreign currency exchange rate risk, or commodity pricing risk since the fiscal year ended December 31, 2024, apart from changes discussed in Notes 6 and 7[101] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[102] - The company is in the process of integrating the internal controls of Weener Packaging, acquired in October 2024, and will include them in the annual assessment for the 2025 fiscal year[104] Part II. Other Information Item 5. Other Information During the first quarter of 2025, no directors or officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements - In Q1 2025, no directors or officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of company securities under Rule 10b5-1(c)[105] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act and XBRL data files - Exhibits filed include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, and Inline XBRL documents[106] Signatures