UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2019
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-11846
A. Full title of the Plan:
APTARGROUP, INC. PROFIT
SHARING AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
APTARGROUP, INC.
265 Exchange Drive, Suite 100
Crystal Lake, Illinois 60014
Telephone: (815) 477-0424
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Note: All other schedules of additional financial information required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 (ERISA) have been omitted because they are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Participants and the Administrative Committee
AptarGroup, Inc. Profit Sharing and Savings Plan
Crystal Lake, Illinois
Opinion on the Financial Statements
We have audited the accompanying statement of net assets available for benefits of AptarGroup, Inc. Profit Sharing and Savings Plan (the “Plan”) as of December 31, 2019, the related statement of changes in net assets available for benefits for the year then ended, and the related notes (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2019, and the changes in net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by the Plan’s management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
1
Supplemental Information
The supplemental information in the accompanying schedules of assets (held at end of year) as of December 31, 2019 and schedule of delinquent participant contributions for the year ended December 31, 2019 have been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but included supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
| /s/ BDO USA, LLP |
| BDO USA, LLP |
We have served as the Plan’s auditor since 2020.
Chicago, Illinois
June 18, 2020
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Participants and the Administrative Committee
AptarGroup, Inc. Profit Sharing and Savings Plan
Crystal Lake, Illinois
Opinion on the Financial Statements
We have audited the accompanying statement of net assets available for benefits of AptarGroup, Inc. Profit Sharing and Savings Plan (the "Plan") as of December 31, 2018, and the related notes (collectively referred to as "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
| /s/ Crowe LLP |
| Crowe LLP |
We served as the Plan’s auditor from 2005.
Oak Brook, Illinois
June 19, 2019
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APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE
FOR BENEFITS
AT DECEMBER 31, 2019 AND 2018
|
| 2019 |
| 2018 | ||
Assets: | | | | | | |
Investments, at fair value (Note 3) | | $ | 240,406,932 | | $ | 192,616,527 |
| | | | | | |
Contributions receivable: | | | | | | |
Participant | | | 302,828 | | | 284,820 |
Employer | | | 116,174 | | | 104,622 |
| | | | | | |
Notes receivable from participants | | | 4,379,518 | | | 4,185,681 |
| | | | | | |
Other receivables: unsettled trades | | | 57,984 | | | — |
Total receivables | | | 4,856,504 | | | 4,575,123 |
| | | | | | |
Prepaid administrative expense | | | — | | | 4,500 |
| | | | | | |
Total Assets | | | 245,263,436 | | | 197,196,150 |
| | | | | | |
Liabilities: | | | | | | |
Accrued administrative expense | | | 10,286 | | | 14,479 |
| | | | | | |
Net assets available for benefits | | $ | 245,253,150 | | $ | 197,181,671 |
The accompanying notes are an integral part of these statements.
4
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2019
Additions to net assets attributed to: |
| | |
| | | |
Contributions: | | | |
| | | |
Participant | | $ | 11,318,455 |
Rollover | | | 1,752,743 |
Employer | | | 3,873,542 |
Total contributions | | | 16,944,740 |
| | | |
Income from investments: | | | |
| | | |
Dividends | | | 10,063,280 |
Interest | | | 344,070 |
Net appreciation in fair value of investments | | | 34,550,188 |
Total investment income | | | 44,957,538 |
| | | |
Total Additions | | | 61,902,278 |
| | | |
Deductions from net assets attributed to: | | | |
| | | |
Benefits paid to participants | | | 30,562,616 |
Administrative expenses | | | 54,210 |
| | | |
Total Deductions | | | 30,616,826 |
| | | |
Net increase before plan transfers | | | 31,285,452 |
Plan transfer (Note 1) | | | 16,786,027 |
| | | |
Net increase in net assets available for benefits for the year | | | 48,071,479 |
Net assets available for benefits, beginning of the year | | | 197,181,671 |
| | | |
Net assets available for benefits, end of the year | | $ | 245,253,150 |
The accompanying notes are an integral part of these statements.
5
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
NOTE 1 - DESCRIPTION OF THE PLAN
General Plan Information
The following description of the AptarGroup, Inc. Profit Sharing and Savings Plan (the “Plan”) provides only general information. Participants should refer to the plan document or summary plan description for a more complete description of the Plan’s provisions.
The Plan, established on April 22, 1993, is a participant-directed defined contribution plan which covers eligible full-time and part-time non-union employees of AptarGroup, Inc. and certain of its subsidiaries (the “Company” or the “Employer”). The Plan is administered by a committee appointed by the Company, consisting of Company employees. Fidelity Management Trust Company (the “Trustee”) is the trustee for the Plan.
Effective April 1, 2019, employees of the following subsidiaries of AptarGroup, Inc. became eligible to participate in the Plan: Capital Cups, Inc., Capital Plastics Products LLC, CSP Technologies, Inc., CSP Technologies North America LLC, CV Partners, Maxwell Chase Technologies LLC and Total Innovative Packaging Inc. Employees of Capital Cups, Inc., Capital Plastics Products LLC, CSP Technologies, Inc., CSP Technologies North America LLC previously participated in the CSP Technologies 401(k) Plan.
On May 1, 2019, $16,786,027 from the CSP Technologies 401(k) Plan was merged with and into the Plan. The participant account balances from the CSP Technologies 401(k) Plan were merged into the existing participant accounts under the Plan, creating one account under the Plan for each participant.
Effective October 31, 2019, employees of Noble International, LLC (subsidiary of AptarGroup, Inc.) became eligible to participate in the Plan.
Eligibility and Participant Contributions
A participant (“Participant” or “Participants”) is a full-time employee who becomes eligible to participate on the first day of the month following 30 days of service, or a part-time employee who becomes eligible to participate after completion of 1,000 hours of service in a defined twelve-month period. If an employee has not enrolled in the Plan within 30 days from the eligibility date, the employee will be automatically enrolled, deferring at 3% of eligible compensation, unless the employee elects to not participate in the Plan. A Participant can authorize contributions of salary to the Plan of not less than 1% and not more than 25% of earnings (subject to Internal Revenue Code (“IRC”) limitations). Contributions can be traditional pre-tax, Roth after-tax, or a combination of the two contribution types. Each Participant who was age 50 or older by the end of 2019 was also permitted under the IRC and the Plan to contribute an additional $6,500 in catch-up contributions. Participants’ earnings are generally defined as total compensation for services rendered to the Employer. Participants may elect to suspend their contributions at any time. Eligible employees will
6
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
not share in any Employer contributions for any period in which they voluntarily suspend their contributions or do not participate in the Plan. Active participation can be elected again at any time. Participants who contribute less than 6% will have their contribution percentage automatically increased annually on April 1st by 1% until they reach a maximum of 6%. Participants may opt out of this Plan provision at any time.
Employer Contributions
The amount of Employer contributions is determined annually by the Employer on a discretionary basis. Such contributions are computed as a matching percentage of each Participant’s contribution within specified limits. The Company matched 50% of Participant contributions up to the first 6% of eligible compensation deferred, for the year ended December 31, 2019. The number of participants eligible for 50% of the first 6% match was approximately 2,180 in 2019.
For employees of Noble International, LLC, the Company matched 100% of Participant contributions up to the first 4% of eligible compensation deferred. The number of participants eligible for 100% of the first 4% match was approximately 40 in 2019.
Plan Investment Options
Participants may direct their contributions and the employer matching contribution to any combination of investment options offered by the Plan.
Participant Accounts
A Participant may elect to transfer certain portions of his or her account in the Plan from one fund to another up to twelve times per year subject to certain restrictions between the Government Money Market Fund and Managed Income Portfolio. Each Participant’s account is credited with contributions and an allocation of plan earnings, and reduced for benefit payments and certain administrative expenses. Plan earnings are determined and credited to each Participant’s account on a daily basis in accordance with the proportion of a Participant’s account to all accounts.
Vesting and Forfeitures
Each Participant is fully vested in his or her contributions and related earnings at all times. Vesting of the Employer contribution account occurs at the rate of 20% per year of service on a cumulative basis for each year of service with a participating Employer. When a Participant terminates employment for any reason other than retirement after age 65, death or disability, the nonvested amounts of the Employer contributions will be forfeited and used to reduce administrative expenses of the Plan and then used to reduce future contributions of the Employer. The amount of such forfeitures available to reduce future contributions of the Employer was $116,893 and $67,972 as of December 31, 2019 and 2018, respectively.
7
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
Nonvested amounts for Participants who terminate employment for any reason other than retirement after age 65, death or disability, will be reinstated if re-employment by the Employer occurs prior to incurring five consecutive one year breaks in service as defined by the Plan agreement.
Payment of Benefits
Participants may elect to receive vested benefits in the form of a lump-sum cash distribution or a direct rollover transfer to an eligible retirement plan. When a terminated Participant’s vested balance is $5,000 or less, the Participant is required to take a lump-sum distribution of the benefit.
Certain participant accounts were previously part of Pittway Blue Chip Plan (prior plan under Pittway Corporation before the packaging operations were spun off as AptarGroup, Inc.). For the account portion attributable to Pittway Blue Chip Plan, participants may elect to receive vested benefits in the form of a lump-sum cash distribution, installment payments, or a combination of these forms, or a direct rollover transfer to an eligible retirement plan.
While employed, in the event of hardship, Participants may withdraw a portion of their vested account balances as defined by the Plan. The Plan allows for in-service withdrawals for Participants that have attained age 59.5. Upon withdrawal from the Plan, the Participant will receive the amount of his or her contributions plus the vested portion of his or her Employer contributions.
Notes Receivable from Participants
The Plan provides that a Participant may, for specified reasons, borrow from the Plan an amount not to exceed the lesser of 50% of the Participant’s vested account balance or $50,000. Each Participant loan is evidenced by a note and each Participant note carries an interest rate equal to the prime rate plus 1% (loans opened during the year ended December 31, 2019 had interest rates on outstanding notes ranging from 5.75% to 6.50%) charged by the Trustee on the date of the loan. Repayment occurs through payroll withholding over a period not to exceed 5 years or up to 10 years if the loan has been used to purchase the primary residence of the Participant.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
Valuation of Investments
The Plan’s investments are stated at fair value.
8
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
Concentration of Investments
The Plan allows Participants to invest in the common stock of the Plan Sponsor, AptarGroup, Inc. The Plan’s investment in the common stock of the Plan Sponsor was 15.0% and 17.7% of plan investments as of December 31, 2019 and 2018, respectively. A significant decline in the market value of the Employer’s securities would significantly affect the net assets available for benefits.
Contributions
Employer and Participant contributions are invested directly in appropriate funds based upon Participant elections made at the date of enrollment or through authorized changes in elections.
Payment of Benefits
Benefits are recorded when paid.
Notes Receivable from Participants
Notes receivable from participants are reported at their unpaid principal balance plus any accrued but unpaid interest, with no allowance for credit losses, as repayments of principal and interest are received through payroll deductions and the notes are collateralized by the Participants’ account balances.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of net assets and changes thereto. Actual amounts could differ from those estimates.
Security Transactions and Investment Income Recognition
Purchases and sales of securities, including related gains and losses, are recorded as of the trade date. Unsettled security investments represent transactions entered into prior to the end of the accounting period for which cash settlement is made in a subsequent period. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Net appreciation (depreciation) in the fair value of investments includes the Plan's gains and losses on investments bought and sold as well as held during the year.
Trustee and Administrative Expenses
Expenses incurred in the administration of the Plan and investment management fees are paid by the Plan through plan forfeitures, except for loan service fees, which are paid by the Participants. Certain other costs of plan administration are paid by the Company.
Recent Accounting Pronouncement
In August 2018, the Financial Accounting Standards Board issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for
9
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
Fair Value Measurement. The ASU modifies the disclosure requirements for the fair value measurements in Topic 820, including the elimination, modification to, and addition of certain disclosures. The ASU is effective for fiscal years beginning after December 15, 2019. The provisions of the ASU are not expected to have a material impact on the Plan’s financial statements.
NOTE 3 - FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received by the Plan for an asset or paid by the Plan to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date in the Plan’s principal or most advantageous market for the asset or liability. There is an established fair value hierarchy which requires the Plan to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy places the highest priority on unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurements) and gives the lowest priority to unobservable inputs (Level 3 measurements). The three levels of inputs within the fair value hierarchy are defined as follows:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Plan has the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect the Plan’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
In some cases, a valuation technique used to measure fair value may include inputs from multiple levels of the fair value hierarchy. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.
The following descriptions of the valuation methods and assumptions used by the Plan to estimate the fair value of investments apply to investments held directly by the Plan:
Company common stock: The fair values of AptarGroup, Inc. common stock are determined by obtaining quoted prices from a nationally recognized exchange (Level 1 inputs).
Mutual funds: The fair values of mutual fund investments are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs).
10
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
Money market fund: The fair value of the money market fund is determined based upon the quoted redemption prices and recent transaction prices of $1.00 per share (Level 2 inputs), with no discounts for credit quality or liquidity restrictions.
Stable value collective trust fund: The fair values of participation units in the stable value collective trust is based upon the net asset value of such fund. Units of participation are redeemable upon receipt of Participant’s instruction based on the next determined net asset value per unit. Net asset value per unit is determined each business day.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Investments measured at fair value on a recurring basis are summarized below:
| | Assets at Fair Value as of December 31, 2019 | ||||||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Common stock | | $ | 36,030,823 | | $ | — | | $ | — | | $ | 36,030,823 |
Mutual funds | | | 198,286,775 | | | — | | | — | | | 198,286,775 |
Money market fund | | | — | | | 4,407 | | | — | | | 4,407 |
Total assets in fair value hierarchy | | | 234,317,598 | | | 4,407 | | | — | | | 234,322,005 |
Investments measured at net asset value (a) | | | — | | | — | | | — | | | 6,084,927 |
Investments at fair value | | $ | 234,317,598 | | $ | 4,407 | | $ | — | | $ | 240,406,932 |
11
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
| | Assets at Fair Value as of December 31, 2018 | ||||||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Common stock | | $ | 34,144,686 | | $ | — | | $ | — | | $ | 34,144,686 |
Mutual funds | | | 151,262,361 | | | — | | | — | | | 151,262,361 |
Money market fund | | | — | | | 3,610 | | | — | | | 3,610 |
Total assets in fair value hierarchy | | | 185,407,047 | | | 3,610 | | | — | | | 185,410,657 |
Investments measured at net asset value (a) | | | — | | | — | | | — | | | 7,205,870 |
Investments at fair value | | $ | 185,407,047 | | $ | 3,610 | | $ | — | | $ | 192,616,527 |
| (a) | In accordance with Subtopic 820-10, certain investments in a common collective trust fund that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in the above tables are intended to permit reconciliation of the fair value hierarchy to the line items presented in the statements of net assets available for benefits. |
There were no transfers between Level 1 and Level 2 investments during 2019.
NOTE 4 - PARTY-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under Department of Labor regulations as any fiduciary of the Plan, any party rendering services to the Plan, the Company, and certain others. Party-in-interest transactions included investments in the AptarGroup Stock Fund. At December 31, 2019 and 2018, the Plan had $36,030,823 and $34,144,686, respectively, invested in Employer Stock through an investment fund managed by the Trustee. The Plan held 311,631 and 362,971 shares of Employer stock as of December 31, 2019 and 2018, respectively. Dividends were paid on these shares in the amount of $466,082 during the year ended December 31, 2019. These transactions also qualify as party-in-interest transactions.
Additionally, certain plan investments are shares of mutual funds or collective trusts managed by the Trustee or an affiliate of the Trustee; therefore, these transactions qualify as party-in-interest. Notes receivable from participants also reflect party-in-interest transactions. Fees paid by the participants to the Trustee for loan services and other participant-initiated transactions amounted to $84,095 for the year ended December 31, 2019. Fees paid by the Plan through plan forfeitures to the Trustee and Marquette Investment Manager for trustee and investment management fees amounted to $37,115 and $18,000, respectively, for the year ended December 31, 2019. The Plan received a revenue credit from the Plan Trustee of $85,000 for the year ended December 31, 2019, which is deposited into plan forfeitures. The revenue credit from the Plan Trustee is used to pay plan expenses
12
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
and any unused funds at year end are allocated to participant accounts. These transactions are not prohibited transactions as defined under the Employee Retirement Income Security Act of 1974 (“ERISA”).
NOTE 5 - FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter dated June 27, 2014 that the Plan is designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and continues to be operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the Plan. The Plan is subject to routine audits by taxing authorities; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for years prior to 2016.
NOTE 6 - RISKS AND UNCERTAINTIES
Investment securities are exposed to various risks, such as interest rate, market, liquidity, and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect Participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits.
NOTE 7 - DELINQUENT PARTICIPANT CONTRIBUTIONS
The Company failed to remit certain employee deferrals to the Plan in a timely manner according to DOL regulations during 2019 aggregating $27,898. The Company has calculated lost earnings and deposited the lost earnings into the Plan during 2019.
NOTE 8 - AMENDMENT AND TERMINATION OF PLAN
The Plan may be amended at any time by the Company. However, no amendment may adversely affect the current rights of the Participants in the Plan with respect to contributions made prior to the date of the amendment.
Although it has not expressed any intent to do so, the Company reserves the right to discontinue Employer contributions or to terminate its participation in the Plan at any time. In the event of a partial
13
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
or complete termination of the Plan, all Participants with respect to whom the Plan is being terminated shall be fully vested in their accounts as of the date of the termination of the Plan.
NOTE 9 - SUBSEQUENT EVENT
In March 2020, the World Health Organization declared the novel strain of coronavirus ("COVID-19") a global pandemic and recommended containment and mitigation measures worldwide. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. This pandemic has adversely affected global economic activity and greatly contributed to significant deterioration and instability in financial markets. Investment securities are exposed to various risks, such as interest rate, market, liquidity and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the fair values of investment securities will occur in the near term and that such changes could materially affect Participants' account balances. Because the values of the Plan's individual investments have and will fluctuate in response to changing market conditions, the amount of losses that will be recognized in subsequent periods, if any, and related impact on the Plan's liquidity cannot be determined at this time.
On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes several relief provisions available to tax-qualified retirement plans and their participants. Plan management has evaluated the relief provisions available to plan participants under the CARES Act and has implemented the following provisions:
| ● | Special coronavirus distributions up to $100,000 |
| ● | Extend the period for loan repayments, if applicable, up to one year |
Plan management has evaluated subsequent events for recognition and disclosure through June 18, 2020, which is the date the financial statements were available to be issued.
14
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
FOR THE YEAR ENDED DECEMBER 31, 2019
| ||||
Check here if Late Participant Loan Repayments are Included | Total that Constitute Nonexempt Prohibited Transactions | Total Fully Corrected Under VFCP1 and PTE2 2002-51 | ||
Contributions Not Corrected | Contributions Corrected Outside VFCP1 | Contributions Pending Correction in VFCP1 | ||
| | $27,898* | |
|
*Lost earnings were remitted to the trust in June and July 2019.
1 Voluntary Fiduciary Correction Program (“VFCP”)
2 Prohibited Transaction Exemption (“PTE”)
16
Schedule H, Line 4i
APTARGROUP, INC.
PROFIT SHARING AND SAVINGS PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AT DECEMBER 31, 2019
Name of plan sponsor: | AptarGroup, Inc. |
Employer identification number: | 36-3853103 |
Three-digit plan number: | 002 |
| | | | | | | | | | | |
| |
| |
| Description |
| |
| | | |
| Issuer | | Identity of Issue | | of Investment | | Cost** | | Fair Value | ||
Common Stock | |||||||||||
* | AptarGroup, Inc. | | Common Stock Fund | | Common Stock | | | | $ | 36,030,823 | |
| | | | | | | | | | | |
Mutual Funds | |||||||||||
* | Fidelity Investments | | Government Money | | | | | | | | |
| | | Market Fund | | Money Market Mutual Fund | | | | | 13,286,802 | |
| BAMCO, Inc. | | Baron Asset Fund | | Mutual Fund | | | | | 7,785,091 | |
* | Fidelity Investments | | Diversified International | | | | | | | | |
| | | K Fund | | Mutual Fund | | | | | 11,737,262 | |
| Allianz Global | | NFJ Dividend Value Fund | | | | | | | | |
| Investors | | R6 Class | | Mutual Fund | | | | | 16,028,690 | |
* | Fidelity Investments | | Stock Selector | | | | | | | | |
| | | Small Cap Fund | | Mutual Fund | | | | | 7,678,311 | |
| Baird Funds | | Aggregate Bond Fund | | | | | | | | |
| | | Institutional Class | | Mutual Fund | | | | | 10,499,971 | |
| Third Avenue | | | | | | | | | | |
| Management LLC | | Real Estate Value Fund | | Mutual Fund | | | | | 660,098 | |
* | Fidelity Investments | | Fidelity Contrafund K | | Mutual Fund | | | | | 35,390,474 | |
| Vanguard Group | | Vanguard 500 Index Fund | | | | | | | | |
| | | Admiral Class | | Mutual Fund | | | | | 13,907,065 | |
* | Fidelity Investments | | Freedom Income Fund K | | Mutual Fund | | | | | 1,003,832 | |
* | Fidelity Investments | | Freedom 2005 Fund K | | Mutual Fund | | | | | 116,015 | |
* | Fidelity Investments | | Freedom 2010 Fund K | | Mutual Fund | | | | | 1,364,790 | |
* | Fidelity Investments | | Freedom 2015 Fund K | | Mutual Fund | | | | | 1,731,623 | |
* | Fidelity Investments | | Freedom 2020 Fund K | | Mutual Fund | | | | | 7,333,873 | |
* | Fidelity Investments | | Freedom 2025 Fund K | | Mutual Fund | | | | | 13,975,854 | |
* | Fidelity Investments | | Freedom 2030 Fund K | | Mutual Fund | | | | | 14,372,519 | |
* | Fidelity Investments | | Freedom 2035 Fund K | | Mutual Fund | | | | | 14,305,803 | |
* | Fidelity Investments | | Freedom 2040 Fund K | | Mutual Fund | | | | | 9,105,219 | |
* | Fidelity Investments | | Freedom 2045 Fund K | | Mutual Fund | | | | | 7,083,709 | |
* | Fidelity Investments | | Freedom 2050 Fund K | | Mutual Fund | | | | | 7,071,563 | |
* | Fidelity Investments | | Freedom 2055 Fund K | | Mutual Fund | | | | | 2,542,832 | |
* | Fidelity Investments | | Freedom 2060 Fund K | | Mutual Fund | | | | | 1,287,360 | |
* | Fidelity Investments | | Freedom 2065 Fund K | | Mutual Fund | | | | | 18,019 | |
| | ||||||||||
Money Market Funds | |||||||||||
* | Fidelity Investments | | Cash Reserves Fund | | Money Market Fund | | | | | 4,407 | |
| | ||||||||||
Stable Value Funds | |||||||||||
* | Fidelity Management | | Managed Income | | | | | | | | |
| Trust Company | | Portfolio | | Collective Trust Fund | | | | | 6,084,927 | |
| | ||||||||||
Participant Loans | |||||||||||
* | Plan Participants | | Participant Loans – Range of interest rates 4.25-6.50% | | | | | 4,379,518 | |||
| | | | | | | $ | 244,786,450 | |||
*Party-in-interest
**Investments are participant-directed. Cost is not required to be presented.
17
Pursuant to the requirements of the Securities Exchange Act of 1934, AptarGroup, Inc., as plan administrator, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| AptarGroup, Inc. Profit Sharing and Savings Plan | | |
| | | |
| | | |
| By: | AptarGroup, Inc., as Plan Administrator | |
| | | |
| | | |
| By: | /s/ Matt Wolter | |
| | Matt Wolter | |
| | Senior Manager, Employee Benefits and HRIS | |
June 18, 2020
18
Exhibit |
| Description |
23.1* | | Consent of BDO USA, LLP, Independent Registered Public Accounting Firm. |
23.2* | | Consent of Crowe LLP, Independent Registered Public Accounting Firm. |
* Filed herewith.
19
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (333-209716) of AptarGroup, Inc. of our report dated June 18, 2020, relating to the financial statements and supplemental schedules of AptarGroup, Inc. Profit Sharing and Savings Plan which appear in this Form 11-K for the year ended December 31, 2019.
| /s/ BDO USA, LLP |
| BDO USA, LLP |
Chicago, Illinois
June 18, 2020
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-209716 on Form S-8 of AptarGroup, Inc., of our report dated June 19, 2019 appearing in this Annual Report on Form 11-K of AptarGroup, Inc. Profit Sharing and Savings Plan for the year ended December 31, 2019.
/s/ Crowe LLP
Crowe LLP
Oak Brook, Illinois
June 18, 2020