Silgan (SLGN) - 2021 Q1 - Quarterly Report

Part I. Financial Information Financial Statements This section presents Silgan Holdings Inc.'s unaudited condensed consolidated financial statements for Q1 2021, detailing financial position, performance, cash flows, and equity, and notes segment renamings - Effective with the first quarter of 2021, the company renamed its Closures segment to Dispensing and Specialty Closures and its Plastic Containers segment to Custom Containers to better reflect their product offerings and strategic focus[22] Condensed Consolidated Balance Sheets As of March 31, 2021, total assets were $6.44 billion, total liabilities $5.17 billion, and stockholders' equity $1.28 billion, reflecting minor period-over-period changes Condensed Consolidated Balance Sheet Highlights (USD in thousands) | Account | March 31, 2021 | Dec. 31, 2020 | March 31, 2020 | | :--- | :--- | :--- | :--- | | Total Current Assets | $1,819,238 | $1,799,193 | $1,982,345 | | Total Assets | $6,441,472 | $6,511,586 | $5,528,538 | | Total Current Liabilities | $1,155,108 | $1,191,620 | $1,643,834 | | Total Liabilities | $5,165,116 | $5,258,713 | $4,507,963 | | Total Stockholders' Equity | $1,276,356 | $1,252,873 | $1,020,575 | Condensed Consolidated Statements of Income Q1 2021 saw net sales increase 20.2% to $1.24 billion, with net income rising to $73.3 million and diluted EPS to $0.66 Q1 2021 vs Q1 2020 Income Statement (USD in thousands, except per share amounts) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net sales | $1,238,110 | $1,030,384 | | Gross profit | $221,466 | $185,098 | | Income before interest and income taxes | $126,549 | $102,141 | | Net income | $73,281 | $57,600 | | Diluted net income per share | $0.66 | $0.52 | Condensed Consolidated Statements of Comprehensive Income Comprehensive income for Q1 2021 significantly increased to $42.4 million, primarily influenced by net income offset by foreign currency translation losses Q1 2021 vs Q1 2020 Comprehensive Income (USD in thousands) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Net income | $73,281 | $57,600 | | Foreign currency translation | $(33,372) | $(36,439) | | Other comprehensive loss | $(30,853) | $(37,955) | | Comprehensive income | $42,428 | $19,645 | Condensed Consolidated Statements of Cash Flows Q1 2021 saw net cash used in operating activities of $172.1 million, with a net decrease in cash and cash equivalents of $219.4 million for the period Cash Flow Summary for the three months ended March 31 (USD in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(172,148) | $(168,136) | | Net cash used in investing activities | $(68,362) | $(104,441) | | Net cash provided by financing activities | $25,693 | $688,650 | | Net (decrease) increase in cash | $(219,350) | $411,022 | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity increased to $1.28 billion by March 31, 2021, driven by net income, partially offset by dividends and other comprehensive loss - Dividends declared on common stock per share increased to $0.14 in Q1 2021 from $0.12 in Q1 2020[19] Notes to Condensed Consolidated Financial Statements This section provides detailed disclosures on revenue recognition, rationalization charges, long-term debt, financial instruments, and segment performance data Revenue by Segment (Q1, USD in thousands) | Segment | 2021 | 2020 | | :--- | :--- | :--- | | Dispensing and Specialty Closures | $509,352 | $357,151 | | Metal Containers | $554,081 | $508,519 | | Custom Containers | $174,677 | $164,714 | | Total | $1,238,110 | $1,030,384 | Rationalization Charges by Segment (Q1, USD in thousands) | Segment | 2021 | 2020 | | :--- | :--- | :--- | | Dispensing and Specialty Closures | $5,231 | $742 | | Metal Containers | $5,021 | $1,963 | | Custom Containers | $105 | $94 | | Total | $10,357 | $2,799 | - On February 10, 2021, the company issued $500.0 million of 1.4% Senior Secured Notes due 2026 and used the proceeds to prepay $500.0 million of outstanding term loans, resulting in a pre-tax charge of $0.9 million for loss on early extinguishment of debt[32] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2021 financial results, highlighting a 20.2% increase in net sales driven by volume and mix, strong segment growth, and the refinancing of debt to maintain liquidity Results of Operations Q1 2021 consolidated net sales increased 20.2% to $1.24 billion, driven by strong volume growth across all segments, particularly Dispensing and Specialty Closures - Dispensing and Specialty Closures segment sales increased $152.1 million (42.6%), primarily from a 9% increase in unit volumes, the Albéa acquisition, and favorable foreign currency translation[75] - Metal Container segment sales increased $45.6 million (9.0%), driven by a 9% rise in unit volumes due to high consumer demand for food cans[76] - Segment income for Metal Containers decreased by $1.9 million, primarily due to higher production costs associated with severe winter weather, investments in hiring, and a higher percentage of smaller cans sold[82] Capital Resources and Liquidity The company's liquidity is supported by cash from operations and its credit facility, with $500 million in new notes issued to refinance debt and maintain ample borrowing capacity - In February 2021, the company issued $500.0 million of 1.4% Notes and used the proceeds to prepay $500.0 million of outstanding term loans under its Credit Agreement[87] - At March 31, 2021, available borrowing capacity under the Credit Agreement was $1.04 billion and Cdn $15.0 million[91] - The company is in compliance with all financial and operating covenants in its financing agreements and expects to remain so during 2021[94] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks include interest rates, foreign currency, and commodity prices, with no material changes to its risk profile since the 2020 Annual Report - The company's primary market risks stem from interest rates, foreign currency exchange rates, and commodity price changes[103] - There has not been a material change to the company's market risk profile or management policies since the fiscal year ended December 31, 2020, apart from changes related to debt activities[104] Controls and Procedures The CEO and CFO concluded that disclosure controls and procedures are effective, with ongoing integration of acquired business internal controls for the 2021 annual assessment - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[105] - The company is in the process of integrating the internal controls of the acquired Albéa Dispensing Business and will include them in the annual assessment for the 2021 fiscal year[107] Part II. Other Information Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL financial data files - Exhibits filed include CEO and CFO certifications under the Sarbanes-Oxley Act (Sections 302 and 906)[109] - The filing includes interactive data files formatted in Inline XBRL[109]