By: Jim Johnson
April 30, 2014
Integration of Portola Packaging Inc., acquired late last year, is going “pretty well” for Silgan Holdings Inc., the company said.
Silgan, based in Stamford, Conn., said first quarter earnings benefitted by about 2 cents per share thanks to the addition of Portola.
For the year, the company expects to add between 5 and 10 cents per share of profit thanks to the acquisition.
“The integration is going pretty well, so I think we’re gaining confidence on the ability to certainly be in that range and perhaps even to the higher side of that range before the year is out,” Chief Financial Officer Robert B. Lewis said on a conference call to discuss first quarter results.
Overall, Silgan saw revenue increase across all lines of business, including plastic containers and closures, as profits also increased.
The Stamford, Conn.-based company earned $31.5 million, or 49 cents per diluted share, on revenue of $855.8 million for the quarter ended March 31. That compares to earnings of $25.4 million, or 38 cents per diluted share, on revenue of $795.7 million for last year’s first quarter.
A large portion of the increase in revenue comes from the Portola acquisition in October, the company said.
Silgan breaks its business into three segments, metal containers, plastics containers and closures.
Closure sales were $213.8 million during the first quarter, an increase of $52.7 million from $161.8 million for the first quarter of 2013. The increase is primarily due to a unit volume increase due largely to the Portola deal. Favorable foreign currency translation also helped, the company said.
Revenue from plastic containers were $173.6 million for the first quarter, up from $170.8 million for the first three months of 2013, Silgan reported.
Net sales of the plastic container business were $173.6 million in the first quarter of 2014, an increase of $2.8 million, or 1.6 percent, as compared to $170.8 million in 2013.
The higher revenue from plastic containers comes primarily from higher selling prices due to a pass through of higher raw material costs and what the company calls a more favorable mix of products sold.
A volume decrease of about 2 percent, due to efforts to rebalance the business portfolio, as well as unfavorable foreign currency translation partially offset higher revenues, the company said.
Metal container sales were $468.4 million, up $4.6 million from the previous first quarter.
Silgan also it expects adjusted net income of $3.10 to $3.30 per diluted share for the full year.