AptarGroup(US:ATR)2024-02-08 16:00Financial Performance - Net sales for the year ended December 31, 2023, were $3,487.45 million, an increase of 4.97% from $3,322.25 million in 2022 [217]. - Operating income rose to $404.02 million in 2023, up from $379.27 million in 2022, reflecting a growth of 6.52% [217]. - Net income attributable to AptarGroup, Inc. increased to $284.49 million in 2023, compared to $239.29 million in 2022, representing a growth of 18.87% [217]. - Total revenue for the year ended December 31, 2023, was $3,487.5 million, an increase from $3,322.2 million in 2022, representing a growth of approximately 5% [265]. - Net income for 2023 was $284.176 million, an increase of 18.6% compared to $239.555 million in 2022 [225]. - Cash and equivalents increased significantly to $223.64 million in 2023, up from $141.73 million in 2022, marking a growth of 57.73% [220]. - Total assets as of December 31, 2023, were $4,451.89 million, compared to $4,203.46 million in 2022, indicating a growth of 5.91% [220]. - The company reported a net income of $284,487 thousand for the year ended December 31, 2023, compared to $284,176 thousand in 2022, a slight increase [224]. Expenses and Liabilities - The company’s total operating expenses for 2023 were $3,083.43 million, an increase from $2,942.98 million in 2022 [217]. - Total current liabilities increased to $1,251,309 thousand in 2023 from $917,176 thousand in 2022, representing a 36.5% increase [222]. - Long-term obligations decreased to $681,188 thousand in 2023 from $1,052,597 thousand in 2022, a reduction of 35.3% [222]. - The total deferred liabilities and other increased to $198,095 thousand in 2023 from $165,481 thousand in 2022, a growth of 19.6% [222]. - Total liabilities, including accounts payable and accrued liabilities, were $793,089 million in 2023, slightly down from $794,385 million in 2022 [290]. Shareholder Returns - Dividends per common share increased to $1.58 in 2023, up from $1.52 in 2022, reflecting a growth of 3.95% [217]. - Dividends paid in 2023 totaled $103.683 million, compared to $99.461 million in 2022, reflecting a 4.5% increase [225]. - The company repurchased approximately 399 thousand shares of common stock in 2023 at a total cost of $47.6 million, with $60.7 million remaining for future repurchases [370]. Goodwill and Intangible Assets - As of December 31, 2023, the company has approximately $963.4 million in recorded goodwill, which may be subject to impairment based on future business conditions [94]. - Goodwill as of December 31, 2023, totaled $963.418 million, with a decrease in Aptar Beauty's goodwill to $287.097 million due to segment realignment [283]. - Total intangible assets as of December 31, 2023, amounted to $520,233 million, with a net value of $283,211 million after accumulated amortization of $237,022 million [287]. - The aggregate amortization expense for intangible assets for the years ended December 31, 2023, 2022, and 2021 was $44,720 million, $43,574 million, and $41,072 million, respectively [287]. Regulatory and Compliance Risks - The company is subject to various laws and regulations, including data privacy laws like GDPR and CPRA, which can be costly and time-consuming to comply with [95]. - The company's products are regulated by the U.S. FDA and similar agencies, potentially leading to delays in product revenue realization and increased costs [96]. - Future government regulations on healthcare cost containment may impact pharmaceutical sales, affecting prices and demand for the company's products [103]. - The company faces risks from lawsuits and claims, including product liability, which could result in substantial costs and affect normal business operations [97]. Cybersecurity - Increased global cybersecurity threats pose risks to the company's operations, prompting the implementation of a comprehensive cybersecurity strategy [112]. - The company maintains cybersecurity insurance as part of its overall risk management strategy [115]. - The Audit Committee oversees cybersecurity risks and receives regular updates on significant developments related to cybersecurity [119]. - The company has not experienced any material cybersecurity events to date, but acknowledges that such threats could materially affect its business strategy and financial condition [120]. Tax and Accounting Changes - The company is monitoring the impact of global minimum tax rules, effective from January 1, 2024, on its consolidated results for 2024 [105]. - The company has carry forward tax losses in Luxembourg amounting to $131.4 million, with no benefit recorded in the financial statements due to lack of expected realization [244]. - The company is evaluating the impact of ASU 2023-07, which requires enhanced disclosures about significant segment expenses, effective for fiscal years beginning after December 15, 2023 [262]. - The effective income tax rate for 2023 was 24.2%, down from 28.4% in 2022 [294]. Cash Flow and Investments - Net cash provided by operations increased to $575.239 million in 2023, up from $478.617 million in 2022, representing a growth of 20.2% [225]. - Capital expenditures for 2023 were $312.342 million, slightly higher than $310.427 million in 2022 [225]. - The company recognized a gain of $0.8 million from the sale of two buildings in France during the third quarter of 2023 [234]. - The company made acquisitions totaling $16.570 million in 2023, net of cash acquired [225]. Employee Benefits and Compensation - The net periodic benefit cost for domestic plans decreased to $5,891 million in 2023 from $16,512 million in 2022, a decline of 64.3% [328]. - Total contributions to the 401(k) plan were approximately $5.0 million for the years ended December 31, 2023, 2022, and 2021 [344]. - The company contributed $0.5 million to domestic defined benefit plans in 2023 and plans to contribute the same amount in 2024 [338]. Foreign Currency and Hedging - The company maintains a foreign exchange risk management policy to protect against adverse changes in exchange rates, utilizing forward exchange contracts and cross currency swaps [348]. - The company entered into a seven-year USD/EUR fixed-to-fixed cross currency interest rate swap to hedge $203 million of fixed-rate USD debt, with a fair value liability of $22.2 million as of December 31, 2023 [352]. - The total notional amount of outstanding foreign currency forward exchange contracts as of December 31, 2023, was $50.8 million, with a fair value of $0.4 million recorded in prepaid and other assets [353].