What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 83 added, 48 removed, 164 unchanged (44% of the section changed)

15 unchanged sentences

RESULTS OF OPERATIONS

The following table sets forth certain unaudited income statement data expressed as a percentage of net sales for the three months ended March 31:

The following table sets forth certain unaudited income statement data expressed as a percentage of net sales for the periods presented:

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Dispensing and Specialty Closures 45.6 % 40.9 % 45.7 % 40.8 %

14 unchanged sentences

Net income 5.8 % 5.5 % 5.3 % 4.9 %

Summary unaudited results of operations for the three months ended March 31 are provided below.

Summary unaudited results of operations for the periods presented are provided below.

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

(dollars in millions)

9 unchanged sentences

Consolidated $ 167.5 $ 141.8 $ 298.1 $ 253.6

Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

In the first quarter of 2025, consolidated net sales were $1.47 billion, an increase of $149.7 million, or 11.4 percent, as compared to the first quarter of 2024 primarily due to the inclusion of net sales from Weener Packaging, higher organic volumes across all segments and the pass through of higher raw material costs in the metal containers and custom containers segments, partially offset by the impact from unfavorable foreign currency translation of approximately $16 million.

In the second quarter of 2025, consolidated net sales were $1.5 billion, an increase of $157.8 million, or 11.4 percent, as compared to the second quarter of 2024 primarily due to higher net sales in the dispensing and specialty closures segment as a result of the inclusion of net sales from Weener Packaging and higher organic unit volumes of dispensing products, the pass through of higher raw material and other manufacturing costs in the metal containers segment and the impact from favorable foreign currency translation of approximately $13.0 million, partially offset by lower unit volumes of specialty

closures primarily for the North American beverage markets in the dispensing and specialty closures segment, lower volumes in the custom containers segment and a less favorable mix of products sold in the metal containers segment.

In the first six months of 2025, consolidated net sales were $3.0 billion, an increase of $307.4 million, or 11.4 percent, as compared to the first six months of 2024 primarily due to higher net sales in the dispensing and specialty closures segment as a result of the inclusion of net sales from Weener Packaging and higher organic unit volumes of dispensing products, the pass through of higher raw material and other manufacturing costs and higher unit volumes in the metal containers segment and the pass through of higher raw material costs in the custom containers segment.

These increases were partially offset by a less favorable mix of products sold in the metal containers segment, lower unit volumes of specialty closures primarily for the North American beverage markets in the dispensing and specialty closures segment and the impact of unfavorable foreign currency translation of approximately $3.0 million.

Gross Profit .

Gross profit margin increased 1.4 percentage points to 18.4 percent in the first quarter of 2025 as compared to the same period in 2024 primarily for the reasons discussed below in "Income before Interest and Income Taxes."

Gross profit margin increased 0.9 percentage points to 19.4 percent in the second quarter of 2025 as compared to the same period in 2024 and increased 1.1 percentage points to 18.9 percent in the first six months of 2025 as compared to the same periods in 2024 primarily for the reasons discussed below in "Income before Interest and Income Taxes".

Selling, General and Administrative Expenses .

In the first quarter of 2025, selling, general and administrative expenses as a percentage of consolidated net sales increased to 8.8 percent as compared to 7.6 percent in the first quarter of 2024.

For the first quarter of 2025, selling, general and administrative expenses increased $28.6 million to $129.1 million as compared to the first quarter of 2024.

The increase in selling, general and administrative expenses was primarily due to the inclusion of selling, general and administrative expenses of Weener Packaging and higher expenses for corporate development activities.

In the second quarter of 2025, selling, general and administrative expenses as a percentage of consolidated net sales increased to 7.9 percent as compared to 7.8 percent in the second quarter of 2024.

For the second quarter of 2025, selling, general and administrative expenses increased $14.1 million to $121.8 million as compared to the second quarter of 2024.

In the first six months of 2025, selling, general and administrative expenses as a percentage of consolidated net sales increased to 8.3 percent as compared to 7.7 percent in the first six months of 2024.

In the first six months of 2025, selling, general and administrative expenses increased $42.7 million to $250.9 million as compared to the first six months of 2024.

The increase in selling, general and administrative expenses for each of the second quarter and the first six months of 2025 was primarily due to the inclusion of selling, general and administrative expenses of Weener Packaging and higher expenses for corporate development activities.

Income before Interest and Income Taxes .

In the first quarter of 2025, income before interest and income taxes increased by $18.8 million to $130.5 million as compared to $111.7 million in the first quarter of 2024, and margins increased to 8.9 percent from 8.5 percent over the same periods.

The increase in income before interest and income taxes was primarily the result of the inclusion of income before interest and income taxes of Weener Packaging and improved manufacturing productivity and cost performance and higher organic volumes across all segments.

Rationalization charges were $11.0 million and $11.7 million in the first quarters of 2025 and 2024, respectively.

Costs attributed to announced acquisitions were $1.1 million in the first quarter of 2025.

In the second quarter of 2025, income before interest and income taxes increased by $25.7 million to $167.5 million as compared to $141.8 million in the second quarter of 2024, and margins increased to 10.9 percent from 10.3 percent over the same periods.

The increase in income before interest and income taxes was primarily the result of the inclusion of income before interest and income taxes of Weener Packaging, improved manufacturing productivity and cost performance in the metal containers and custom containers segments and higher organic unit volumes of dispensing products in the dispensing and specialty closures segment, partially offset by a less favorable mix of products sold in the metal containers segment and a decline in unit volumes for specialty closures in the dispensing and specialty closures segment.

Rationalization charges were $9.9 million and $6.9 million in the second quarters of 2025 and 2024, respectively.

Costs attributed to announced acquisitions were $5.5 million in the second quarter of 2024.

In the first six months of 2025, income before interest and income taxes increased by $44.5 million to $298.1 million as compared to $253.6 million in the first six months of 2024, and margins increased to 9.9 percent from 9.4 percent over the same periods.

The increase in income before interest and income taxes was primarily the result of the inclusion of income before interest and income taxes of Weener Packaging, improved manufacturing productivity and cost performance in the metal containers and custom containers segments and higher organic unit volumes of dispensing products in the dispensing and specialty closures segment, partially offset by a less favorable mix of products sold in the metal containers segment, a decline in unit volumes for specialty closures in the dispensing and specialty closures segment and the unfavorable impact of foreign currency.

Rationalization charges were $20.8 million and $18.6 million in the first six months of 2025 and 2024, respectively.

Costs attributed to announced acquisitions were $1.1 million and $5.5 million in the first six months of 2025 and 2024, respectively.

Interest and Other Debt Expense .

In the first quarter of 2025, interest and other debt expense increased $4.3 million to $42.9 million as compared to $38.6 million in the first quarter of 2024.

The increase was primarily due to higher average borrowings during the current year period related to the Weener Packaging acquisition completed in October 2024.

In the second quarter of 2025, interest and other debt expense increased $7.4 million to $48.7 million as compared to $41.3 million in the second quarter of 2024.

In the first six months of 2025, interest and other debt expense increased $11.6 million to $91.6 million as compared to $80.0 million in the first six months of 2024.

The increases in interest and other debt expense in both the second quarter and first six months of 2025 were primarily due to higher average borrowings during the current year period related to the Weener Packaging acquisition completed in October 2024.

Provision for Income Taxes .

For the first quarters of 2025 and 2024, the effective tax rates were 23.8 percent and 24.5 percent, respectively.

For the second quarters of 2025 and 2024, the effective tax rates were 25.6 percent and 24.3 percent, respectively.

For the first six months of 2025 and 2024, the effective tax rates were 24.8 percent and 24.4 percent, respectively.

The increase in the effective tax rate in the second quarter of 2025 was primarily due to changes in the geographic mix of profit in the current year period as compared to the prior year period.

Non-GAAP Measures

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The Company's management views the operating performance of its affiliates which are joint ventures as part of the Company's operating performance and therefore believes that the Company's share of the net operating results of its affiliates which are joint ventures should be included in the Company's adjusted EBIT.

A reconciliation of such non-GAAP financial measures for the three months ended March 31 is provided below:

A reconciliation of such non-GAAP financial measures for the periods presented is provided below:

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

(Dollars in millions)

26 unchanged sentences

Dispensing and Specialty Closures Segment

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

(Dollars in millions)

4 unchanged sentences

Adjusted EBIT margin 15.4 % 16.4 % 15.1 % 15.5 %

In the first quarter of 2025, net sales for the dispensing and specialty closures segment increased $135.2 million, or 25.2 percent, as compared to the first quarter of 2024.

This increase was primarily the result of the inclusion of net sales from Weener Packaging, higher organic unit volumes of approximately three percent and a more favorable mix of products sold, partially offset by the impact of unfavorable foreign currency translation of approximately $12.0 million.

In the first quarter of 2025, adjusted EBIT of the dispensing and specialty closures segment increased $21.4 million as compared to the first quarter of 2024, and adjusted EBIT margin increased to 14.8 percent from 14.5 percent over the same periods.

The increase in adjusted EBIT was primarily due to the inclusion of adjusted EBIT from Weener Packaging, improved manufacturing productivity and cost performance, higher organic unit volumes and a more favorable mix of products sold, partially offset by the unfavorable impact of foreign currency.

In the second quarter of 2025, net sales for the dispensing and specialty closures segment increased $136.8 million, or 24.2 percent, as compared to the second quarter of 2024.

This increase was primarily the result of higher net sales of $143.6 million due to the inclusion of net sales from Weener Packaging and higher organic unit volumes of dispensing products and the impact of favorable foreign currency translation of approximately $8.0 million, partially offset by lower unit volumes of specialty closures of approximately three percent primarily as a result of a decline in volumes for the North American beverage markets due to cool and wet weather conditions and lower than anticipated promotional activity.

In the first six months of 2025, net sales for the dispensing and specialty closures segment increased $272.0 million, or 24.7 percent, as compared to the first six months of 2024.

This increase was primarily the result of higher net sales of $287.0 million due to the inclusion of net sales from Weener Packaging and higher organic unit volumes of dispensing products, partially offset by the impact of unfavorable foreign currency translation of approximately $4.0 million and lower unit volumes of specialty closures of approximately two percent primarily as a result of a decline in volumes for the North American beverage markets due to cool and wet weather conditions and lower than anticipated promotional activity.

In the second quarter of 2025, adjusted EBIT of the dispensing and specialty closures segment increased $15.2 million as compared to the second quarter of 2024, while adjusted EBIT margin decreased to 15.4 percent from 16.4 percent over the same periods.

The increase in adjusted EBIT was primarily due to the inclusion of adjusted EBIT from Weener Packaging and higher organic unit volumes for dispensing products, partially offset by a decline in unit volumes for specialty closures.

In the first six months of 2025, adjusted EBIT of the dispensing and specialty closures segment increased $36.6 million as compared to the first six months of 2024, while adjusted EBIT margin decreased to 15.1 percent from 15.5 percent over the same periods.

Metal Containers Segment

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

(Dollars in millions)

4 unchanged sentences

Adjusted EBIT margin 10.5 % 9.0 % 9.2 % 8.2 %

In the first quarter of 2025, net sales for the metal containers segment increased $11.3 million, or 1.8 percent, as compared to the first quarter of 2024.

This increase was primarily the result of higher unit volumes of approximately four percent and the pass through of higher raw material costs, partially offset by a less favorable mix of products sold and the impact of unfavorable foreign currency translation of approximately $2.0 million.

The increase in unit volumes was primarily due to higher volumes for pet food and soup markets.

In the first quarter of 2025, adjusted EBIT of the metal containers segment increased $4.6 million as compared to the first quarter of 2024, and adjusted EBIT margin increased to 7.9 percent from 7.3 percent for the same periods.

The increase in adjusted EBIT was primarily due to improved manufacturing productivity and cost performance and higher unit volumes, partially offset by a less favorable mix of products sold due to higher unit volumes of smaller cans for pet food markets.

In the second quarter of 2025, net sales for the metal containers segment increased $25.3 million, or 3.9 percent, as compared to the second quarter of 2024.

This increase was primarily the result of the pass through of higher raw material and other manufacturing costs and the impact of favorable foreign currency translation of approximately $5.0 million, partially offset by a less favorable mix of products sold.

Unit volumes for the metal containers segment were comparable to the prior year period with higher volumes for pet food markets offset by lower volumes for soup markets.

In the first six months of 2025, net sales for the metal containers segment increased $36.6 million, or 2.9 percent, as compared to the first six months of 2024.

This increase was primarily the result of the pass through of higher raw material and other manufacturing costs, higher unit volumes of approximately two percent and the impact of favorable foreign currency translation of approximately $3.0 million, partially offset by a less favorable mix of products sold.

The increase in unit volumes was primarily due to higher volumes for pet food markets.

In the second quarter of 2025, adjusted EBIT of the metal containers segment increased $12.3 million as compared to the second quarter of 2024, and adjusted EBIT margin increased to 10.5 percent from 9.0 percent for the same periods.

The increase in adjusted EBIT was primarily due to improved manufacturing productivity and cost performance due in part to lower production in the prior year period associated with a customer that reduced its fruit and vegetable pack plans, partially offset by a less favorable mix of products sold due to higher unit volumes of smaller cans for pet food markets.

In the first six months of 2025, adjusted EBIT of the metal containers segment increased $16.8 million as compared to the first six months of 2024, and adjusted EBIT margin increased to 9.2 percent from 8.2 percent for the same periods.

Custom Containers Segment

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

(Dollars in millions)

4 unchanged sentences

Adjusted EBIT margin 15.5 % 13.6 % 15.1 % 13.0 %

In the first quarter of 2025, net sales for the custom containers segment increased $3.2 million, or 2.0 percent, as compared to the first quarter of 2024.

This increase was principally due to higher volumes of approximately two percent primarily driven by new business awards and the pass through of higher raw material costs, partially offset by the impact of unfavorable foreign currency translation of approximately $2.0 million.

In the first quarter of 2025, adjusted EBIT of the custom containers segment increased $4.4 million as compared to the first quarter of 2024, and adjusted EBIT margin increased to 14.7 percent from 12.3 percent over the same periods.

The increase in adjusted EBIT was primarily attributable to improved manufacturing productivity and cost performance and higher volumes.

In the second quarter of 2025, net sales for the custom containers segment decreased $4.3 million, or 2.6 percent, as compared to the second quarter of 2024.

This decrease was principally due to lower volumes of approximately two percent due primarily to the exit of lower margin business as a result of footprint optimization plans.

In the first six months of 2025, net sales for the custom containers segment decreased $1.2 million, or 0.4 percent, as compared to the first six months of 2024.

This decrease was principally due to unfavorable foreign currency translation of approximately $2.0 million, partially offset by the pass through of higher raw material costs.

In the second quarter of 2025, adjusted EBIT of the custom containers segment increased $2.4 million as compared to the second quarter of 2024, and adjusted EBIT margin increased to 15.5 percent from 13.6 percent over the same periods.

The increase in adjusted EBIT was primarily attributable to improved manufacturing productivity and cost performance.

In the first six months of 2025, adjusted EBIT of the custom containers segment increased $6.8 million as compared to the first six months of 2024, and adjusted EBIT margin increased to 15.1 percent from 13.0 percent over the same periods.

The increase in adjusted EBIT was primarily attributable to improved manufacturing productivity and cost performance.

CAPITAL RESOURCES AND LIQUIDITY

3 unchanged sentences

We funded this repayment with Euro revolving loan borrowings under the Credit Agreement and cash on hand.

For the three months ended March 31, 2025, we used net borrowings of revolving loans of $1.1 billion, cash and cash equivalents of $469.9 million and the positive effect of exchange rate changes on cash and cash equivalents of $13.0 million to fund the repayment of long-term debt of $706.3 million, cash used in operations of $683.4 million, decreases in outstanding checks of $85.0 million, net capital expenditures and other investing activities of $82.5 million, dividends paid on our common stock of $21.9 million, repurchases of our common stock of $6.9 million and the repayment of principal amounts under finance leases of $1.3 million.

For the three months ended March 31, 2024, we used net borrowings of revolving loans of $582.4 million and cash and cash equivalents of $334.3 million to fund cash used in operations of $547.8 million, decreases in outstanding checks of $160.6 million, the repayment of long-term debt of $100.0 million, net capital expenditures and other investing activities of $72.5 million, dividends paid on our common stock of $21.1 million, repurchases of our common stock of $7.7 million, the repayment of principal amounts under finance leases of $0.3 million and the negative effect of exchange rate changes on cash and cash equivalents of $6.7 million.

At March 31, 2025, we had $1.1 billion of revolving loans outstanding under the Credit Agreement.

After taking into account outstanding letters of credit, the available portion of revolving loans under the Credit Agreement at March 31, 2025 was $398.2 million.

For the six months ended June 30, 2025, we used net borrowings of revolving loans of $1.4 billion, cash and cash equivalents of $505.4 million and the positive effect of exchange rate changes on cash and cash equivalents of $31.4 million to fund cash used in operations of $904.9 million, the repayment of long-term debt of $706.3 million, net capital expenditures and other investing activities of $145.8 million, decreases in outstanding checks of $85.0 million, dividends paid on our common stock of $43.4 million, repurchases of our common stock of $6.9 million and the repayment of principal amounts under finance leases of $2.4 million.

For the six months ended June 30, 2024, we used net borrowings of revolving loans of an aggregate of $664.0 million and cash and cash equivalents of $340.1 million to fund cash used in operations of $526.9 million, decreases in outstanding checks of $160.6 million, the repayment of long-term debt of $100.0 million, net capital expenditures and other investing activities of $128.4 million, dividends paid on our common stock of $41.5 million, the repayment of principal amounts under finance leases of $25.3 million, repurchases of our common stock of $7.7 million and the negative effect of exchange rate changes on cash and cash equivalents of $13.7 million.

At June 30, 2025, we had $1.4 billion of revolving loans outstanding under the Credit Agreement.

After taking into account outstanding letters of credit, the available portion of revolving loans under the Credit Agreement at June 30, 2025 was $118.3 million.

Because we sell metal containers and closures used in fruit and vegetable pack processing, we have seasonal sales.

3 unchanged sentences

We fund seasonal working capital requirements through revolving loans under the Credit Agreement, other foreign bank loans and cash on hand.

We may use the available portion of revolving loans under the Credit Agreement, after taking into account our seasonal needs and outstanding

letters of credit, for other general corporate purposes including acquisitions, capital expenditures, dividends, stock repurchases and to refinance or repurchase other debt.

We may use the available portion of revolving loans under the Credit Agreement, after taking into account our seasonal needs and outstanding letters of credit, for other general corporate purposes including acquisitions, capital expenditures, dividends, stock repurchases and to refinance or repurchase other debt.

We believe that cash generated from operations and funds from borrowings available under the Credit Agreement and other foreign bank loans will be sufficient to meet our expected operating needs, planned capital expenditures, debt service, tax obligations, pension benefit plan contributions, share repurchases and common stock dividends for the foreseeable future.

14 unchanged sentences

Separate from this SCF program, we and suppliers who participate in this SCF program generally maintain the contractual right to require the other party to negotiate in good faith the existing payment terms as a result of changes in market conditions, including changes in interest rates and general market liquidity, or in some cases for any reason.

Outstanding trade accounts payables subject to this SCF program were approximately $262.9 million, $252.6 million and $303.7 million at March 31, 2025 and 2024 and December 31, 2024, respectively.

Outstanding trade accounts payables subject to this SCF program were approximately $248.4 million, $251.0 million and $303.7 million at June 30, 2025 and 2024 and December 31, 2024, respectively.

Guaranteed Securities

1 unchanged sentence

subsidiaries that also guarantee our obligations under the Credit Agreement, collectively the Obligor Group.

The following summarized financial information relates to the Obligor Group as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025.

The following summarized financial information relates to the Obligor Group as of June 30, 2025 and December 31, 2024 and for the six months ended June 30, 2025.

Intercompany transactions, equity investments and other intercompany activity within the Obligor Group have been eliminated from the summarized financial information.

Investments in subsidiaries of Silgan that are not part of the Obligor Group of $2.2 billion and $2.1 billion as of March 31, 2025 and December 31, 2024, respectively, are not included in noncurrent assets in the table below.

March 31, 2025 Dec.

Investments in subsidiaries of Silgan that are not part of the Obligor Group of $2.4 billion and $2.1 billion as of June 30, 2025 and December 31, 2024, respectively, are not included in noncurrent assets in the table below.

June 30, 2025 Dec.

(Dollars in millions)

3 unchanged sentences

Noncurrent liabilities 3,630.9 3,987.8

At March 31, 2025 and December 31, 2024, the Obligor Group held current receivables due from other subsidiary companies of $32.0 million and $33.0 million, respectively;

long-term notes receivable due from other subsidiary companies of $1.1 billion in each of the periods;

At June 30, 2025 and December 31, 2024, the Obligor Group held current receivables due from other subsidiary companies of $28.6 million and $33.0 million, respectively;

long-term notes receivable due from other subsidiary companies of $1.2 billion and $1.1 billion, respectively;

and current payables due to other subsidiary companies of $13.5 million and $19.0 million, respectively.

Three months ended

March 31, 2025

Six Months Ended

June 30, 2025

(Dollars in millions)

2 unchanged sentences

Net income 73.0

For the three months ended March 31, 2025, net income in the table above excludes income from equity method investments of other subsidiary companies of $37.5 million.

For the three months ended March 31, 2025, the Obligor Group recorded the following transactions with other subsidiary companies:

For the six months ended June 30, 2025, net income in the table above excludes income from equity method investments of other subsidiary companies of $83.9 million.

For the six months ended June 30, 2025, the Obligor Group recorded the following transactions with other subsidiary companies:

sales to such other subsidiary companies of $30.9 million;

1 unchanged sentence

and net interest income from such other subsidiary companies of $25.8 million.

For the three months ended March 31, 2025, the Obligor Group did not receive dividends from other subsidiary companies.

For the six months ended June 30, 2025, the Obligor Group did not receive dividends from other subsidiary companies.

Rationalization Charges

1 unchanged sentence

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

Under our rationalization plans, we made cash payments of $3.5 million and $11.8 million for the three months ended March 31, 2025 and 2024, respectively.

Under our rationalization plans, we made cash payments of $8.0 million and $21.1 million for the six months ended June 30, 2025 and 2024, respectively.

Excluding the impact of our withdrawal from the Central States Pension Plan in 2019, remaining expenses and cash expenditures for our rationalization plans are expected to be $16.1 million and $21.6 million, respectively.

Remaining expenses for the accretion of interest for the withdrawal liability related to the Central States Pension Plan are expected to average approximately $0.8 million per year and be recognized annually through 2040, and remaining cash expenditures for the withdrawal liability related to the Central States Pension Plan are expected to be approximately $2.6 million annually through 2040.

You should also read Note 3 to our Condensed Consolidated Financial Statements for the three months ended March 31, 2025 included elsewhere in this Quarterly Report.

You should also read Note 3 to our Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025 included elsewhere in this Quarterly Report.

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 2. Management’s Discussion and Analysis