What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-03 compared with 2023-05-03 · 106 added, 62 removed, 365 unchanged (32% of the section changed)

3 unchanged sentences

(Dollars in thousands)

March 31, 2023 March 31, 2022 Dec.

June 30, 2023 June 30, 2022 Dec.

(unaudited) (unaudited)

31 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the three months ended March 31, 2023 and 2022

For the three and six months ended June 30, 2023 and 2022

(Dollars and shares in thousands, except per share amounts)

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Net sales $ 1,426,727 $ 1,543,781 $ 2,845,008 $ 2,985,667

22 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three months ended March 31, 2023 and 2022

For the three and six months ended June 30, 2023 and 2022

(Dollars in thousands)

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Net income $ 78,890 $ 92,675 $ 150,919 $ 177,550

3 unchanged sentences

Foreign currency translation 39,147 ( 64,053 ) 58,868 ( 51,703 )

Other comprehensive income 20,740 15,186

Other comprehensive income (loss) 45,016 ( 63,574 ) 65,756 ( 48,388 )

Comprehensive income $ 123,906 $ 29,101 $ 216,675 $ 129,162

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2023 and 2022

For the six months ended June 30, 2023 and 2022

(Dollars in thousands)

27 unchanged sentences

Repurchase of common stock ( 30,974 ) ( 39,402 )

Net cash provided by (used in) financing activities 610,375 ( 35,843 )

Net cash provided by financing activities 574,011 96,897

Effect of exchange rate changes on cash and cash equivalents 5,686 ( 8,179 )

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the three months ended March 31, 2023 and 2022

For the three and six months ended June 30, 2023 and 2022

(Dollars and shares in thousands, except per share amounts)

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Common stock - shares outstanding

2 unchanged sentences

Net issuance of treasury stock for vested restricted stock units

46 65 312 455

Repurchases of common stock

( 352 ) ( 650 ) ( 445 ) ( 650 )

Balance at end of period

7 unchanged sentences

Stock compensation expense

3,475 3,991 7,156 8,870

Net issuance of treasury stock for vested restricted stock units

( 190 ) ( 315 ) ( 1,553 ) ( 2,441 )

Balance at end of period

11 unchanged sentences

( 324,570 ) ( 244,642 ) ( 345,310 ) ( 259,828 )

Other comprehensive income 20,740 15,186

Other comprehensive income (loss) 45,016 ( 63,574 ) 65,756 ( 48,388 )

Balance at end of period

4 unchanged sentences

Net issuance of treasury stock for vested restricted stock units

( 415 ) ( 1,245 ) ( 7,664 ) ( 10,593 )

Repurchases of common stock

( 16,957 ) ( 26,367 ) ( 21,757 ) ( 26,367 )

Balance at end of period

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Significant Accounting Policies

8 unchanged sentences

The following tables present our revenues disaggregated by reportable segment and geography as they best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Revenues by segment for the three months ended March 31 were as follows:

Revenues by segment were as follows:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(Dollars in thousands)

3 unchanged sentences

$ 1,426,727 $ 1,543,781 $ 2,845,008 $ 2,985,667

Revenues by geography for the three months ended March 31 were as follows:

Revenues by geography were as follows:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(Dollars in thousands)

2 unchanged sentences

$ 1,426,727 $ 1,543,781 $ 2,845,008 $ 2,985,667

Our contract assets primarily consist of unbilled accounts receivable related to over time revenue recognition and were $ 108.5 million, $ 99.1 million, and $ 110.2 million as of March 31, 2023 and 2022 and December 31, 2022, respectively.

Our contract assets primarily consist of unbilled accounts receivable related to over time revenue recognition and were $ 109.7 million, $ 110.3 million, and $ 110.2 million as of June 30, 2023 and 2022 and December 31, 2022, respectively.

Unbilled receivables are included in trade accounts receivable, net on our Condensed Consolidated Balance Sheets.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Rationalization Charges

1 unchanged sentence

We use a disciplined approach to identify opportunities that generate attractive cash returns.

Rationalization charges by segment for the three months ended March 31 were as follows:

Rationalization charges by segment were as follows:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(Dollars in thousands)

10 unchanged sentences

Utilized and currency translation ( 5,710 ) ( 3,143 ) ( 8,853 )

Balance at March 31, 2023

Balance at June 30, 2023

$ 29,571 $ 164 $ 29,735

Rationalization reserves as of March 31, 2023 were recorded in our Condensed Consolidated Balance Sheet as accrued liabilities of $ 3.2 million and other liabilities of $ 27.6 million.

Rationalization reserves as of June 30, 2023 were recorded in our Condensed Consolidated Balance Sheet as accrued liabilities of $ 2.5 million and other liabilities of $ 27.2 million.

Excluding the impact of our withdrawal from the Central States, Southeast and Southwest Areas Pension Plan, or the Central States Pension Plan, in 2019, remaining expenses and cash expenditures for our rationalization plans are expected to be $ 1.0 million and $ 3.3 million, respectively.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Accumulated Other Comprehensive Loss

14 unchanged sentences

Other comprehensive income 3,523 3,365 58,868 65,756

Balance at March 31, 2023

Balance at June 30, 2023

$ ( 153,210 ) $ 2,593 $ ( 128,937 ) $ ( 279,554 )

The amounts reclassified to earnings from the unrecognized net defined benefit plan costs component of accumulated other comprehensive loss for the three months ended March 31, 2023 were net (losses) of $( 2.6 ) million, excluding income tax benefits of $ 0.3 million.

These net (losses) consisted of amortization of net actuarial (losses) of $( 2.8 ) million and amortization of net prior service credit of $ 0.2 million.

The amounts reclassified to earnings from the unrecognized net defined benefit plan costs component of accumulated other comprehensive loss for the three and six months ended June 30, 2023 were net (losses) of $( 2.6 ) million and $( 5.1 ) million, respectively, excluding income tax benefits of $ 1.4 million and $ 1.6 million, respectively.

For the three and six months ended June 30, 2023, these net (losses) consisted of amortization of net actuarial (losses) of $( 2.8 ) million and $( 5.5 ) million and amortization of net prior service credit of $ 0.2 million and $ 0.4 million, respectively.

Amortization of net actuarial losses and net prior service credit was recorded in other pension and postretirement income in our Condensed Consolidated Statements of Income.

See Note 10 for further information.

The amounts reclassified to earnings from the change in fair value of derivatives component of accumulated other comprehensive loss for the three months ended March 31, 2023 were not significant.

Other comprehensive loss before reclassifications related to foreign currency translation for the three months ended March 31, 2023 consisted of (i) foreign currency gains related to translation of quarter end financial statements of foreign subsidiaries utilizing a functional currency other than the U.S.

dollar of $ 25.6 million, (ii) foreign currency gains related to intra-entity foreign currency transactions that are of a long-term investment nature of $ 0.8 million, and (iii) foreign currency (losses) related to our net investment hedges of $( 8.8 ) million, excluding an income tax benefit of $ 2.1 million.

The amounts reclassified to earnings from the change in fair value of derivatives component of accumulated other comprehensive loss for the three and six months ended June 30, 2023 were not significant.

Other comprehensive income before reclassifications related to foreign currency translation for the three and six months ended June 30, 2023 consisted of (i) foreign currency gains related to translation of quarter end financial statements of foreign subsidiaries utilizing a functional currency other than the U.S.

dollar of $ 16.1 million and $ 41.7 million, respectively, (ii) foreign currency gains related to intra-entity foreign currency transactions that are of a long-term investment nature of $ 1.1 million and $ 1.9 million, respectively, and (iii) foreign currency (losses) related to our net investment hedges of $( 2.1 ) million and $( 10.9 ) million, respectively, excluding income tax benefits of $ 0.5 million and $ 2.6 million, respectively.

See Note 7 for further discussion.

Amounts reclassified from accumulated other comprehensive loss related to foreign currency translation for the three and six months ended June 30, 2023 related to the shutdown of our metal container manufacturing facilities in Russia.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Inventories consisted of the following:

March 31, 2023 March 31, 2022 Dec.

June 30, 2023 June 30, 2022 Dec.

(Dollars in thousands)

8 unchanged sentences

Long-term debt consisted of the following:

March 31, 2023 March 31, 2022 Dec.

June 30, 2023 June 30, 2022 Dec.

(Dollars in thousands)

14 unchanged sentences

$ 3,351,176 $ 3,367,469 $ 3,345,381

At March 31, 2023, the current portion of long-term debt consisted of $ 755.0 million of U.S.

At June 30, 2023, the current portion of long-term debt consisted of $ 738.0 million of U.S.

revolving loans under our amended and restated senior secured credit facility, as amended, or the Credit Agreement, $ 46.7 million of other foreign bank revolving and term loans and $ 26.7 million of finance leases.

On June 22, 2023, we and certain of our wholly owned subsidiaries entered into the Fourth Amendment to Amended and Restated Credit Agreement, or the Fourth Amendment, with the lenders party to the Credit Agreement and Wells Fargo Bank, National Association, as administrative agent.

The Fourth Amendment amended the Credit Agreement to provide for the transition from LIBOR based interest rates to SOFR (Secured Overnight Financing Rates) and SONIA (Sterling Overnight Index Average) based interest rates and to provide for standard interest rate benchmark replacement language.

The Fourth Amendment also reduced the spread adjustments for Term SOFR borrowings.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Financial Instruments

1 unchanged sentence

Due to their short-term maturity, the carrying amounts of trade accounts receivable and trade accounts payable approximate their fair market values.

The following table summarizes the carrying amounts and estimated fair values of our other financial instruments at March 31, 2023:

The following table summarizes the carrying amounts and estimated fair values of our other financial instruments at June 30, 2023:

(Dollars in thousands)

13 unchanged sentences

Financial Instruments Measured at Fair Value

The financial assets and liabilities that were measured on a recurring basis at March 31, 2023 consisted of our cash and cash equivalents and derivative instruments.

The financial assets and liabilities that were measured on a recurring basis at June 30, 2023 consisted of our cash and cash equivalents and derivative instruments.

We measured the fair value of cash and cash equivalents using Level 1 inputs.

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

We utilize certain derivative financial instruments to manage a portion of our interest rate and natural gas cost exposures.

11 unchanged sentences

These agreements have a fixed rate ranging from 3.889 percent to 3.905 percent, mature on April 3, 2026, and were entered into with financial institutions which are expected to fully perform under the terms thereof.

The difference between amounts to be paid or received on our interest rate swap agreements is recorded in interest and other debt expense in our Condensed Consolidated Statements of Income and was not significant for the three months ended March 31, 2023.

The total fair value of our interest rate swaps agreements in effect at March 31, 2023 was not significant.

The total fair value of our interest rate swaps agreements in effect at June 30, 2023 was not significant.

Natural Gas Swap Agreements

We have entered into natural gas swap agreements to manage a portion of our exposure to fluctuations in natural gas prices.

The difference between amounts to be paid or received on our natural gas swap agreements is recorded in cost of goods sold in our Condensed Consolidated Statements of Income and was not significant for the three months ended March 31, 2023.

These agreements are with a financial institution which is expected to fully perform under the terms thereof.

The total fair value of our natural gas swap agreements in effect at March 31, 2023 was not significant.

The total fair value of our natural gas swap agreements in effect at June 30, 2023 was not significant.

Foreign Currency Exchange Rate Risk

1 unchanged sentence

In addition, where available, we have borrowed funds in local currency or implemented certain internal hedging strategies to minimize our foreign currency exchange rate risk related to foreign operations, including net investment hedges related to the 3¼% Senior Notes which are Euro denominated.

Foreign currency (losses) related to our net investment hedges included in accumulated other comprehensive loss for the three months ended March 31, 2023 were $( 8.8 ) million.

Foreign currency (losses) related to our net investment hedges included in accumulated other comprehensive loss for the three and six months ended June 30, 2023 were $( 2.1 ) million and $( 10.9 ) million, respectively.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Commitments and Contingencies

8 unchanged sentences

The suppliers' invoices sold under this SCF program can be outstanding up to 210 days from the invoice date.

Suppliers’ invoices included in this SCF program were $ 318.4 million, $ 372.2 million and $ 346.8 million at March 31, 2023 and 2022 and December 31, 2022, respectively, and were included in accounts payable in our Condensed Consolidated Balance Sheets.

Suppliers’ invoices included in this SCF program were $ 321.9 million, $ 369.5 million and $ 346.8 million at June 30, 2023 and 2022 and December 31, 2022, respectively, and were included in accounts payable in our Condensed Consolidated Balance Sheets.

Retirement Benefits

The components of the net periodic pension benefit cost (credit) for the three months ended March 31 were as follows:

The components of the net periodic pension benefit cost (credit) were as follows:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(Dollars in thousands)

5 unchanged sentences

Net periodic benefit cost (credit) $ 3,735 $ ( 7,695 ) $ 7,457 $ ( 15,340 )

The components of the net periodic other postretirement benefit credit for the three months ended March 31 were as follows:

The components of the net periodic other postretirement benefit credit were as follows:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(Dollars in thousands)

4 unchanged sentences

Net periodic benefit credit $ ( 194 ) $ ( 358 ) $ ( 387 ) $ ( 717 )

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Silgan and its subsidiaries file U.S.

2 unchanged sentences

We have been accepted into the Compliance Assurance Program for the 2022 and 2023 tax years which provides for the review by the IRS of tax matters relating to our tax return prior to filing.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Treasury Stock

On March 4, 2022, our Board of Directors authorized the repurchase by us of up to an aggregate of $ 300.0 million of our common stock by various means from time to time through and including December 31, 2026.

During the three months ended March 31, 2023, we repurchased an aggregate of 92,996 shares of our common stock at an average price per share of $ 51.60 , for a total purchase price of $ 4.8 million.

At March 31, 2023, we had approximately $ 263.1 million remaining under this authorization for the repurchase of our common stock.

During the first three months of 2023, we issued 427,763 treasury shares which had an average cost of $ 3.19 per share for restricted stock units that vested during the period that had been previously issued under the Silgan Holdings Inc.

Amended and Restated 2004 Stock Incentive Plan.

During the six months ended June 30, 2023, we repurchased an aggregate of 445,104 shares of our common stock at an average price per share of $ 48.74 , for a total purchase price of $ 21.7 million.

At June 30, 2023, we had approximately $ 246.2 million remaining under this authorization for the repurchase of our common stock.

During the first six months of 2023, we issued 487,409 treasury shares which had an average cost of $ 3.19 per share for restricted stock units that vested during the period that had been previously issued under a prior stock-based compensation plan.

In accordance with the applicable agreements for such restricted stock units, we repurchased 174,882 shares of our common stock at an average cost of $ 52.71 to satisfy minimum employee withholding tax requirements resulting from the vesting of such restricted stock units.

We account for treasury shares using the first-in, first-out (FIFO) cost method.

As of March 31, 2023, 64,860,050 shares of our common stock were held in treasury.

As of June 30, 2023, 65,166,066 shares of our common stock were held in treasury.

Stock-Based Compensation

We currently have one stock-based compensation plan in effect under which we have issued restricted stock units to our officers, other key employees and outside directors.

In May and June of 2023, 293,190 restricted stock units were granted to certain of our officers, other key employees and outside directors.

The fair value of these restricted stock units at the grant date was $ 13.6 million, which is being amortized ratably over the respective vesting period from the grant date.

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Segment Information

7 unchanged sentences

Adjusted EBIT should not be considered in isolation or as a substitute for income before interest and income taxes or any other financial data prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies.

Reportable segment information for the three months ended March 31 was as follows:

Reportable segment information was as follows:

Dispensing and Specialty Closures Metal

2 unchanged sentences

(Dollars in thousands)

Three months ended March 31, 2023

Three Months Ended June 30, 2023

Net sales $ 560,096 $ 710,864 $ 155,767 $ — $ 1,426,727

1 unchanged sentence

Depreciation 25,756 18,528 8,999 18 53,301

Three months ended March 31, 2022

Three Months Ended June 30, 2022

Net sales $ 602,431 $ 754,396 $ 186,954 $ — $ 1,543,781

1 unchanged sentence

Depreciation 24,808 19,558 8,796 39 53,201

Six Months Ended June 30, 2023

Net sales $ 1,140,028 $ 1,380,960 $ 324,020 $ — $ 2,845,008

Adjusted EBIT 159,818 128,140 38,478 ( 16,234 ) 310,202

Depreciation 50,515 36,516 17,834 58 104,923

Six Months Ended June 30, 2022

Net sales $ 1,200,358 $ 1,405,122 $ 380,187 $ — $ 2,985,667

Adjusted EBIT 196,868 96,390 52,815 ( 12,001 ) 334,072

Depreciation 49,469 40,289 17,539 81 107,378

SILGAN HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Information at March 31, 2023 and 2022 and for the

three months then ended is unaudited)

Total adjusted EBIT is reconciled to income before income taxes for the three months ended March 31 as follows:

(Information at June 30, 2023 and 2022 and for the

three and six months then ended is unaudited)

Total adjusted EBIT is reconciled to income before income taxes as follows:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(Dollars in thousands)

4 unchanged sentences

Rationalization charges 2,667 3,428 6,788 4,807

European Commission settlement — 25,203 — 25,203

Income before interest and income taxes 143,993 158,017 275,221 301,409

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements