-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EEkn2KolZGVcfEGJpeJMJKl5B3GTpda98zdSoFLEPGtCxJG7U9zNqqp3sQJejOco T7CX+RqAQJLVW0J5UkInMw== 0000896622-98-000009.txt : 19980817 0000896622-98-000009.hdr.sgml : 19980817 ACCESSION NUMBER: 0000896622-98-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: APTARGROUP INC CENTRAL INDEX KEY: 0000896622 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 363853103 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11846 FILM NUMBER: 98688041 BUSINESS ADDRESS: STREET 1: 475 W TERRA COTTA AVE STREET 2: STE E CITY: CRYSTAL LAKE STATE: IL ZIP: 60014 BUSINESS PHONE: 8154770424 MAIL ADDRESS: STREET 1: 475 W. TERRA COTTA AVE. SUITE E CITY: CRYSTAL LAKE STATE: IL ZIP: 60014 10-Q 1 SECOND QUARTER 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ----to---- COMMISSION FILE NUMBER 1-11846 AptarGroup, Inc. (Exact Name of Registrant as Specified in its Charter) DELAWARE 36-3853103 (State of Incorporation) (I.R.S. Employer Identification No.) 475 West Terra Cotta Avenue, Suite E, Crystal Lake, Illinois 60014 (Address of Principal Executive Offices) (Zip Code) 815-477-0424 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (August 5, 1998) Common Stock 18,019,535 Page 2 AptarGroup, Inc. FORM 10-Q QUARTER ENDED JUNE 30, 1998 INDEX PART I. FINANCIAL INFORMATION Page ITEM 1. Financial statements (Unaudited) Consolidated Statements of Income - Three and Six Months Ended June 30, 1998 and 1997 3 Consolidated Balance Sheets - June 30, 1998 and December 31, 1997 4 Consolidated Statements of Cash Flows - Six Months Ended June 30, 1998 and 1997 6 Notes to Consolidated Financial Statements 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders 14 ITEM 6. Exhibits and Reports on Form 8-K 14 SIGNATURE 15 Page 3 AptarGroup, Inc. Consolidated Statements of Income (Dollars in Thousands, Except Per Share Data) (Unaudited) Three Months Six Months Ended June 30, Ended June 30, -------------- -------------- 1998 1997 1998 1997 ---- ---- ---- ---- Net Sales.................. $ 181,752 $ 171,811 $ 352,694 $ 330,101 Operating Expenses: Cost of sales......... 113,778 110,456 220,487 211,307 Selling, research & development and administrative....... 29,801 28,249 58,002 53,801 Depreciation and amortization......... 13,353 12,781 26,921 25,300 ------- ------- ------- ------- 156,932 151,486 305,410 290,408 ------- ------- ------- ------- Operating Income........... 24,820 20,325 47,284 39,693 ------ ------ ------ ------ Other Income (Expense): Interest expense...... (1,684) (1,375) (3,090) (2,839) Interest income....... 253 274 528 476 Equity in income of affiliates........... 135 149 318 331 Minority interests.... (125) (104) (209) (184) Miscellaneous, net.... 493 449 1,139 724 --- --- ----- --- (928) (607) (1,314) (1,492) ---- ---- ------ ------ Income Before Income Taxes. 23,892 19,718 45,970 38,201 Provision for Income Taxes. 9,628 7,637 18,525 14,707 ----- ----- ------ ------ Net Income................. $ 14,264 $ 12,081 $ 27,445 $ 23,494 ======== ======== ======== ======== Per Common Share: Basic............... $ .79 $ .67 $ 1.52 $ 1.31 ======= ======== ======== ======== Diluted............. $ .77 $ .66 $ 1.49 $ 1.29 ======= ======== ======== ======== Average Number of Shares outstanding (in thousands): Basic .................... 18,012 17,961 18,004 17,957 Diluted.................... 18,426 18,238 18,397 18,209 See accompanying notes to consolidated financial statements. Page 4 AptarGroup, Inc. Consolidated Balance Sheets (Dollars in Thousands) (Unaudited) June 30, December 31, 1998 1997 ---- ---- Assets Current Assets: Cash and equivalents.............................. $ 26,331 $ 17,717 Accounts and notes receivable, less allowance for doubtfulaccounts of $4,367 in 1998 and $3,812 in 1997.......................................... 167,175 145,034 Inventories................................... 86,754 79,262 Prepayments and other......................... 18,469 14,148 ------ ------ 298,729 256,161 Property, Plant and Equipment: Buildings and improvements.................... 78,851 74,351 Machinery and equipment....................... 488,301 455,382 ------- ------- 567,152 529,733 Less: Accumulated depreciation................ (302,725) (281,899) -------- -------- 264,427 247,834 Land.......................................... 4,297 3,819 ----- ----- 268,724 251,653 ------- ------- Other Assets: Investments in affiliates..................... 12,012 16,495 Goodwill, less accumulated amortization of $6,586 in 1998 and $6,030 in 1997............. 40,987 40,479 Miscellaneous................................. 22,003 20,645 ------ ------ 75,002 77,619 ------ ------ Total Assets $ 642,455 $ 585,433 ========= ========= See accompanying notes to consolidated financial statements. Page 5 AptarGroup, Inc. Consolidated Balance Sheets (Dollars in Thousands) (Unaudited) June 30, December 31, 1998 1997 ---- ---- Liabilities and Stockholder's Equity Current Liabilities: Notes payable................................. $ 11,204 $ -- Current maturities of long-term obligations... 5,500 2,890 Accounts payable and accrued liabilities...... 133,949 122,507 ------- ------- 150,653 125,397 ------- ------- Long-Term Obligations.............................. 80,551 70,740 ------ ------ Deferred Liabilities and Other: Deferred income taxes......................... 23,899 21,432 Retirement and deferred compensation plans.... 12,677 11,872 Minority interests............................ 3,764 4,568 Deferred and other non-current liabilities.... 7,810 9,369 ----- ----- 48,150 47,241 ------ ------ Stockholders' Equity: Common stock, $.01 par value.................. 180 180 Capital in excess of par value................ 105,216 104,699 Retained earnings............................. 299,088 274,524 Accumulated other comprehensive income........ (41,383) (37,348) ------- ------- 363,101 342,055 ------- ------- Total Liabilities and Stockholders' Equity.... $ 642,455 $ 585,433 ========= ========= See accompanying notes to consolidated financial statements. Page 6 AptarGroup, Inc. Consolidated Statements of Cash Flows For the Six Months Ended June 30, 1998 and 1997 (Dollars in Thousands, brackets denote cash outflows) (Unaudited) Six Months Ended June 30, 1998 1997 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income..................................... $ 27,445 $ 23,494 Adjustments to reconcile net income to net cash provided by operations: Depreciation................................... 25,684 23,940 Amortization................................... 1,237 1,360 Provision for bad debts........................ 638 359 Minority interests............................. 209 184 Deferred income taxes.......................... (390) 298 Retirement and deferred compensation plans..... (193) 1,098 Equity in income of affiliates in excess of cash distributions received......... (318) (331) Changes in balance sheet items, excluding effects from foreign currency adjustments: Accounts receivable............................ (18,341) (19,535) Inventories.................................... (5,314) (6,777) Prepaid and other current assets............... (2,850) (2,542) Accounts payable and accrued liabilities....... 8,385 24,072 Other changes, net............................. (2,751) (646) ------ ---- NET CASH PROVIDED BY OPERATIONS................ 33,441 44,974 ------ ------ CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures........................... (29,948) (34,560) Disposition of property and equipment.......... 89 445 Acquisition of businesses...................... (7,181) - (Proceeds) collections of notes receivable, net (48) (48) Investments in affiliates....................... (800) - ---- NET CASH USED BY INVESTING ACTIVITIES........... (37,888) (34,163) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase in notes payable...................... 13,233 5,172 Proceeds from long-term obligations............ 9,297 980 Repayments of long-term obligations............ (6,906) (3,664) Dividends paid................................. (2,880) (2,514) Proceeds from stock options exercised.......... 517 311 --- --- NET CASH PROVIDED BY FINANCING ACTIVITIES...... 13,261 285 ------ --- EFFECT OF EXCHANGE RATE CHANGES ON CASH........ (200) (1,740) ---- ------ NET INCREASE IN CASH AND EQUIVALENTS........... 8,614 9,356 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD.... 17,717 16,386 CASH AND EQUIVALENTS AT END OF PERIOD.......... $ 26,331 $ 25,742 ======== ======== See accompanying notes to consolidated financial statements. Page 7 APTARGROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands, Except Per Share Data) (Unaudited) NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements included the accounts of AptarGroup, Inc. and its subsidiaries. The terms "AptarGroup" or "Company" as used herein refer to AptarGroup, Inc. and its subsidiaries. In the opinion of management, the unaudited consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of financial position and results of operations for the interim periods presented. The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. Accordingly, these financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report to Shareholders incorporated by reference into the Company's Annual Report on Form 10-K for the year ended December 31, 1997. The results of operations of any interim period are not necessarily indicative of the results that may be expected for a fiscal year. NOTE 2 - INVENTORIES At June 30, 1998 and December 31, 1997, inventories, by component, consisted of: June 30, December 31, 1998 1997 ---- ---- Raw Materials..................... $ 30,688 $ 27,187 Work in progress.................. 25,142 21,920 Finished goods.................... 32,233 31,404 ------ ------ Total.................... 88,063 80,511 Less LIFO reserve........ (1,309) (1,249) ------ ------ Total.................... $ 86,754 $ 79,262 ======== ======== Page 8 NOTE 3 - CHANGES IN ACCOUNTING PRINCIPLES Effective January 1, 1998, AptarGroup adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income." This Statement requires that all items recognized under accounting standards as components of comprehensive income be reported in an annual financial statement that is displayed with the same prominence as other annual financial statements. This Statement also requires that an entity classify items of other comprehensive income by their nature in an annual financial statement. For example, other comprehensive income may include foreign currency translation adjustments, minimum pension liability adjustments, and unrealized gains and losses on marketable securities classified as available-for-sale. Annual financial statements for prior periods will be reclassified, as required. AptarGroup's total comprehensive income was as follows: Three months Ended June 30 Six months ended June 30 1998 1997 1998 1997 ---- ---- ---- ---- Net income.......... $14,264 12,081 27,445 23,494 Add/(Subtract): foreign currency translation adjustment........ 5,257 (8,258) (4,035) (28,913) ----- ------ ------ ------- Total comprehensive income (loss)...... $19,521 3,823 23,410 (5,419) ====== ===== ====== ====== ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net sales for the quarter and six months ended June 30, 1998 totaled $181.8 million and $352.7 million, respectively, increases of approximately 6% and 7% when compared to the corresponding periods of 1997. The stronger U.S. dollar relative to the same three and six month periods of 1997 negatively affected the translation of AptarGroup's foreign sales. If the dollar exchange rate had been constant, sales for the three and six months ended June 30, 1998 would have increased approximately 9% and 11%, respectively. The increase for the quarter and six months ended June 30, 1998, is primarily attributed to strong sales of pumps to the pharmaceutical market worldwide and increased sales of pumps to the personal care and fragrance/cosmetics markets in Europe. Sales to customers by European operations represented approximately 54% and 55%, of net sales for the quarter and six months ended June 30, 1998, respectively, compared to 56% and 57% for the same periods a year ago. Sales to customers by U.S. operations represented 41% and 40% of net sales for the quarter and six months ended June 30, 1998 compared to 40% and 39% for the same periods a year ago. Sales from other foreign operations represented 5% of net sales for the quarter and six months ended June 30, 1998 compared to 4% for the same periods a year ago. Cost of sales as a percent of net sales decreased to 62.6% in the second quarter of 1998 compared to 64.3% in the same period a year ago. For the first six Page 9 months of 1998, cost of sales as a percent of net sales decreased to 62.5% compared to 64.0% in the same period a year ago. The decrease for the quarter and six months ended June 30, 1998 is attributed to the mix of products sold, cost savings and a net gain from changes in exchange rates between the comparable quarters on inter-country transactions. Selling, general and administrative expenses (SG&A) increased 5.5% to $29.8 million in the second quarter of 1998 compared to $28.2 million in the same period a year ago. As a percent of net sales, SG&A remained constant in the second quarter of 1998 at 16.4% compared to the second quarter of 1997. SG&A for the six months ended June 30, 1998 increased 7.8% to $58.0 million compared to $53.8 million a year ago. As a percent of net sales, SG&A increased slightly in the first six months of 1998 to 16.4% compared to 16.3% a year ago. Operating income increased to $24.8 million and $47.3 million for the quarter and six months ended June 30, 1998 compared to $20.3 million and $39.7 million for the same periods a year ago. The increase is due to higher sales volume, the mix of products sold, and cost savings. In addition, approximately $0.5 million of the increase for the quarter and approximately $1.0 million of the increase for the six months ended June 30, 1998 is due to the positive effect of changes in foreign exchange rates on inter-country transactions net of the negative impact of translation. European operations represented 74% and 75% of operating income in the second quarter and year to date of 1998, respectively, as compared to 70% and 71% in the same periods a year ago. U.S. operations represented 37% of operating income in the second quarter and year to date in 1998 as compared to 44% and 42% in the corresponding periods of 1997. The difference between Europe and U.S. operations to total operating income is due to operating income from other foreign operations and corporate expenses. The effective tax rate for the second quarter and six months ended June 30, 1998 was 40.3% compared to 38.7% and 38.5% for the same periods a year ago. The increase is primarily due to a 5-percentage point increase in the French corporate income tax rate that was put into law in the fourth quarter 1997, but was retroactive to the beginning of 1997. Under GAAP, this retroactive adjustment was entirely recorded in the fourth quarter of 1997 and therefore was not reflected in reported second quarter and six months ended June 30, 1997 results. Net income for the second quarter increased 18.1% to $14.3 million compared to $12.1 million in the second quarter of 1997. Net income for the six months ended June 30, 1998, increased 16.8% to $27.4 million as compared to $23.5 million in the same period a year ago. The increase in net income for the quarter and six months ended June 30, 1998 is primarily due to higher sales volume, the mix of products sold, cost containment efforts and the positive effect of changes in foreign exchange rates on inter-country transactions net of the negative impact of translation. Page 10 QUARTERLY TRENDS AptarGroup's results of operations in the second half of the year typically have been negatively impacted by European summer holidays and customer plant shutdowns in December. In the future, AptarGroup's results of operations in a quarterly period could be impacted by factors such as changes in product mix, changes in material costs, changes in growth rates in the industries to which AptarGroup's products are sold or changes in general economic conditions in any of the countries in which AptarGroup does business. FOREIGN CURRENCY A significant portion of AptarGroup's operations are located outside the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of AptarGroup's foreign entities. In general, since the majority of the Company's operations are based in Europe, primarily France, Germany and Italy, a strengthening U.S. dollar relative to the major European currencies has a dilutive translation effect on the Company's financial condition and results of operations. Conversely, a weakening U.S. dollar would have an additive effect. Additionally, in some cases, the Company sells products denominated in a currency different from the currency in which the respective costs are incurred. Changes in exchange rates on such inter-country sales impact the Company's results of operations. LIQUIDITY AND CAPITAL RESOURCES Historically, AptarGroup has generated positive cash flow from operations and has utilized the majority of such cash flows to invest in capital projects. Net cash provided by operations in the first six months of 1998 was $33.4 million compared to $45.0 million in the same period a year ago. The decrease is primarily attributed to changes in working capital. Total net working capital at June 30, 1998 was $148.1 million compared to $130.8 million at December 31, 1997. The increase in net working capital is due to the growth of the business in 1998 as well as the seasonal effects experienced during the first half of the year. Net cash used by investing activities increased to $37.9 million from $34.2 million a year ago due primarily to several small acquisitions the Company made in the first six months of 1998. A portion of one of these acquisitions will be paid for by the issuance of 25,000 shares of AptarGroup, Inc. common stock to be delivered in three installments of 6,250 shares in 1999, 6,250 shares in 2000, and 12,500 shares in 2001. These transactions did not have a material impact on page 11 the financial statements of the Company. Management anticipates that capital expenditures for all of 1998 will be approximately $80 million. Net cash provided by financing activities was $13.3 million in the first six months of 1998 compared to net cash provided by financing activities of $285 thousand in 1997. The ratio of interest-bearing debt to total capitalization was 21% at June 30, 1998 and 18% at December 31, 1997. The majority of the Company's debt has been, and continues to be, denominated in foreign currency. AptarGroup has historically borrowed locally to hedge potential currency fluctuations for assets that were purchased outside of the U.S. The Company has a multi-year, unsecured revolving credit agreement allowing borrowings of up to $25 million. Under this credit agreement, interest on borrowings is payable at a rate equal to the London Interbank Offered Rate (LIBOR) plus an amount based on the financial condition of the Company. At June 30, 1998, the amount unused and available under this agreement was $25 million. The Company is required to pay a fee for the unused portion of the commitment. The agreement expires on April 29, 2001. The credit available under the revolving credit agreement provides management with the ability to refinance certain short-term obligations on a long-term basis. As it is management's intent to do so, short-term obligations of $25 million have been reclassified as long-term obligations as of June 30, 1998. Short-term obligations of $21.7 million and $3.3 million of current portion of long-term debt were reclassified as long-term obligations as of December 31, 1997. The revolving credit agreement and a private placement agreement contain covenants that include certain financial tests, including minimum interest coverage, net worth and maximum borrowings. On July 23, 1998, the Board of Directors declared a quarterly dividend of $.08 per share payable on August 25, 1998 to shareholders of record as of August 4, 1998. The Board of Directors also approved a two-for-one stock split to be effected in the form of a stock distribution to shareholders of record as of the close of business on August 4, 1998. Each outstanding share of AptarGroup common stock will be split into two shares of AptarGroup common stock. Certificates representing additional shares as a result of the stock split will be distributed on or about August 25, 1998. The quarterly cash dividend, which is to be issued the same day as the stock split, is deemed to be paid immediately prior to the stock split being effective, and will thus be paid on the pre-split stock. LITIGATION During the second quarter of 1997, the Company received a judgment in its favor as plaintiff in a patent infringement lawsuit relating to an aerosol valve component. The Company was awarded $7.8 million plus interest. The decision has been appealed and the Company cannot predict the ultimate outcome or timing of such appeal. This award is not included in the financial results. Page 12 YEAR 2000 The Company has been evaluating its information technology (IT) and non-IT systems over the past year to determine whether these systems are Year 2000 compliant. The Company has broken down this evaluation project into five phases: project administration, assessment, renovation, testing/implementation, and contingency planning. The Company is in various phases of this Year 2000 project depending upon the business functions and systems evaluated, such as administration, business applications, facilities, management information systems, operations, and sales and distribution. The Company expects to be between the renovation and testing/implementation phases by year-end with contingency planning being completed by the end of the second quarter of 1999. The Company is between the project administration and assessment phase of evaluating the effect of third parties such as the Company's customers and suppliers, on the Year 2000 issue. The Company has over 1,000 customers with no single customer accounting for greater than 6% of the Company's net sales. The principal raw materials used in the Company's production are plastic resins and certain metal products. The Company believes an adequate supply of such raw materials is readily available from existing and alternate sources. As a result, the Company doesn't believe that the failure by any one customer and supplier to be Year 2000 compliant would have a material adverse effect on the results of operations. The Company is unable at this time to quantify the costs involved directly related to fixing Year 2000 issue, but does not believe the related costs will be significant. The Company is unable at this time to describe its most reasonably likely worst case Year 2000 scenario, but is in the process of upgrading certain of its "legacy" systems as a contingency plan in the event that the Company's new systems are not ready by the Year 2000. ADOPTION OF NEW ACCOUNTING STANDARDS In June 1997, the FASB issued Statement No. 131, "Disclosures about Segments of an Enterprise and Related Information" which is effective for fiscal years beginning after December 15, 1997. Statement No. 131 establishes standards for reporting information about operating segments and related disclosures about products and services, geographic areas and major customers in annual financial statements and interim financial reports. The Company is currently evaluating the new Statement and plans to adopt the standards during the year ending December 31, 1998. In February 1998, the FASB issued Statement No. 132, "Employers' Disclosures about Pensions and other Postretirement Benefits" which is effective for fiscal years beginning after December 15, 1997. Statement No. 132 revises employers' disclosures about pension and other postretirement benefit plans. It does not change the measurement or recognition of these plans. The Company is currently evaluating this new Statement and plans to adopt the standards during the year ended December 31, 1998. Page 13 In March 1998 and April 1998, the AcSEC (Accounting Standards Executive Committee) issued Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" and SOP 98-5 "Reporting on the Costs of Start-Up Activities," respectively. Both Statements are effective for fiscal years beginning after December 15, 1998, and early adoption is encouraged. SOP 98-1 provides guidance on accounting for the costs of computer software developed or obtained for internal use. SOP 98-5 requires that entities expense start-up costs and organization costs as they are incurred. The Company has already adopted both of these standards and the impact of adoption was not material to the financial statements. In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." This Statement requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Due to the recent release and complexity of this new standard, an assessment of the impact it will have on our financial position or results of operations has not been completed. FORWARD-LOOKING STATEMENTS In addition to the historical information presented in this quarterly report, the Company has made and will make certain forward-looking statements in this report, other reports filed by the Company with the Securities and Exchange Commission, reports to stockholders and in certain other contexts relating to future net sales, costs of sales, other expenses, profitability, financial resources, products and production schedules, among others. These statements are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's beliefs as well as assumptions made by and information currently available to management. Accordingly, the Company's actual results may differ materially from those expressed or implied in such forward-looking statements due to known and unknown risks and uncertainties that exist in the Company's operations and business environment, including, among other factors, the failure by the Company to produce anticipated cost savings or improve productivity, the timing and magnitude of capital expenditures and acquisitions, currency exchange rates, economic and market conditions in the United States, Europe and the rest of the world, changes in customer spending levels, the demand for existing and new products, the cost and availability of raw materials, and other risks associated with the Company's operations. Although the Company believes that its forward-looking statements are based on reasonable assumptions, there can be no assurance that actual results, performance or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. Page 14 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of stockholders was held on May 13, 1998. A vote was taken by ballot for the election of three directors to hold office until the 2001 Annual Meeting of Stockholders. The following nominees received the number of votes as set forth below: Broker Nominee For Withhold Non-votes ------- --- -------- --------- Robert Barrows 15,191,200 269,820 -0- Alfred Pilz 15,190,812 270,208 -0- Carl A. Siebel 15,187,743 273,277 -0- No votes were cast for any other nominee for director. The directors continuing in office until the 1999 Annual Meeting are King Harris, Ervin J. LeCoque and Peter Pfeiffer. Directors continuing in office until the 2000 Annual Meeting of Stockholders are Eugene Barnett, Ralph Gruska and Leo A. Guthart. No other matters were submitted to a vote by ballot at the 1998 Annual Meeting. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 27 is included with this report. (b) No reports on Form 8-K were filed for the quarter ended June 30, 1998. Page 15 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AptarGroup, Inc. (Registrant) By /s/ Stephen J. Hagge ----------------------- Stephen J. Hagge Executive Vice President and Chief Financial Officer, Secretary and Treasurer (Duly Authorized Officer and Principal Financial Officer) Date: August 14, 1998 EX-27 2 FDS --
5 0000896622 AptarGroup, Inc. 1000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 26,331 0 167,175 (4,367) 86,754 298,729 571,449 (302,725) 642,455 150,653 80,551 0 0 180 363,101 642,455 352,694 352,694 220,487 305,410 84,923 0 (3,090) 45,970 18,525 27,445 0 0 0 27,445 1.52 1.49
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