Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2020 | |
Entity File Number | 1-11846 | |
Entity Registrant Name | APTARGROUP INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-3853103 | |
Entity Address, Address Line One | 265 EXCHANGE DRIVE | |
Entity Address, Address Line Two | SUITE 100 | |
Entity Address, City or Town | CRYSTAL LAKE | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60014 | |
City Area Code | 815 | |
Local Phone Number | 477-0424 | |
Title of 12(b) Security | Common Stock, $.01 par value | |
Trading Symbol | ATR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 64,186,756 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000896622 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||
Net sales | $ 721,553 | $ 744,460 |
Operating Expenses: | ||
Cost of sales (exclusive of depreciation and amortization shown below) | 451,256 | 469,132 |
Selling, research & development and administrative | 126,192 | 121,215 |
Depreciation and amortization | 50,806 | 47,489 |
Restructuring initiatives | 4,839 | 9,530 |
Total Operating Expenses | 633,093 | 647,366 |
Operating Income | 88,460 | 97,094 |
Other (Expense) Income: | ||
Interest expense | (8,388) | (9,214) |
Interest income | 175 | 1,748 |
Equity in results of affiliates | (799) | (95) |
Miscellaneous, net | (1,412) | 466 |
Total Other Income (Expense) | (10,424) | (7,095) |
Income before Income Taxes | 78,036 | 89,999 |
Provision for Income Taxes | 22,786 | 27,000 |
Net Income | 55,250 | 62,999 |
Net (Income) Loss Attributable to Noncontrolling Interests | 3 | 5 |
Net Income Attributable to AptarGroup, Inc. | $ 55,253 | $ 63,004 |
Net Income Attributable to AptarGroup, Inc. Per Common Share: | ||
Basic (in dollars per share) | $ 0.86 | $ 1 |
Diluted (in dollars per share) | $ 0.84 | $ 0.96 |
Average number of shares outstanding: | ||
Basic (in shares) | 64,009 | 62,964 |
Diluted (in shares) | 66,111 | 65,349 |
Dividends per Common Share (in dollars per share) | $ 0.36 | $ 0.34 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net Income | $ 55,250 | $ 62,999 |
Other Comprehensive Income (Loss): | ||
Foreign currency translation adjustments | (42,229) | (9,611) |
Gain (loss) on derivatives, net of tax | 1,483 | (393) |
Defined benefit pension plan, net of tax | ||
Amortization of prior service cost included in net income, net of tax | 71 | 84 |
Amortization of net loss included in net income, net of tax | 1,565 | 637 |
Total defined benefit pension plan, net of tax | 1,636 | 721 |
Total other comprehensive income (loss) | (39,110) | (9,283) |
Comprehensive Income | 16,140 | 53,716 |
Comprehensive (Income) Loss Attributable to Noncontrolling Interests | 3 | (3) |
Comprehensive Income Attributable to AptarGroup, Inc. | $ 16,143 | $ 53,713 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and equivalents | $ 410,840 | $ 241,970 |
Accounts and notes receivable, less current expected credit loss ("CECL") of $5,657 in 2020 and $3,626 in 2019 | 602,027 | 558,428 |
Inventories | 371,859 | 375,795 |
Prepaid and other | 129,926 | 115,048 |
Total Current Assets | 1,514,652 | 1,291,241 |
Property, Plant and Equipment: | ||
Buildings and improvements | 502,706 | 504,328 |
Machinery and equipment | 2,506,084 | 2,521,737 |
Property, Plant and Equipment, Gross | 3,008,790 | 3,026,065 |
Less: Accumulated depreciation | (1,961,683) | (1,963,520) |
Property, Plant and Equipment, Net | 1,047,107 | 1,062,545 |
Land | 24,312 | 25,133 |
Total Property, Plant and Equipment | 1,071,419 | 1,087,678 |
Other Assets: | ||
Investments in equity securities | 39,167 | 8,396 |
Goodwill | 756,081 | 763,461 |
Intangible assets | 284,121 | 291,084 |
Operating lease right-of-use assets | 65,925 | 72,377 |
Miscellaneous | 45,187 | 47,882 |
Total Other Assets | 1,190,481 | 1,183,200 |
Total Assets | 3,776,552 | 3,562,119 |
Current Liabilities: | ||
Notes payable, revolving credit facility and overdrafts | 220,511 | 44,259 |
Current maturities of long-term obligations, net of unamortized debt issuance costs | 65,049 | 65,988 |
Accounts payable, accrued and other liabilities | 605,738 | 573,028 |
Total Current Liabilities | 891,298 | 683,275 |
Long-term obligations, net of unamortized debt issuance costs | 1,075,745 | 1,085,453 |
Deferred Liabilities and Other: | ||
Deferred income taxes | 39,795 | 41,388 |
Retirement and deferred compensation plans | 104,140 | 101,225 |
Operating lease liabilities | 49,004 | 55,276 |
Deferred and other non-current liabilities | 28,947 | 23,250 |
Commitments and contingencies | ||
Total Deferred Liabilities and Other | 221,886 | 221,139 |
AptarGroup, Inc. stockholders' equity | ||
Common stock, $.01 par value, 199 million shares authorized, 68.9 and 68.6 million shares issued as of March 31, 2020 and December 31, 2019, respectively | 689 | 686 |
Capital in excess of par value | 785,567 | 770,596 |
Retained earnings | 1,554,665 | 1,523,820 |
Accumulated other comprehensive (loss) | (381,058) | (341,948) |
Less treasury stock at cost, 4.7 and 4.8 million shares as of March 31, 2020 and December 31, 2019, respectively | (372,573) | (381,238) |
Total AptarGroup, Inc. Stockholders' Equity | 1,587,290 | 1,571,916 |
Noncontrolling interests in subsidiaries | 333 | 336 |
Total Stockholders' Equity | 1,587,623 | 1,572,252 |
Total Liabilities and Stockholders' Equity | $ 3,776,552 | $ 3,562,119 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands, shares in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | $ 5,657 | $ 3,626 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 199 | 199 |
Common stock, shares issued | 68.9 | 68.6 |
Treasury stock, shares | 4.7 | 4.8 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Common Stock Par Value | Treasury Stock | Capital in Excess of Par Value | Non-Controlling Interest | Total |
Balance at Dec. 31, 2018 | $ 1,371,826 | $ (310,504) | $ 673 | $ (318,208) | $ 678,769 | $ 315 | $ 1,422,871 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 63,004 | (5) | 62,999 | ||||
Foreign currency translation adjustments | (9,619) | 8 | (9,611) | ||||
Changes in unrecognized pension gains (losses) and related amortization, net of tax | 721 | 721 | |||||
Changes in derivative gains (losses), net of tax | (393) | (393) | |||||
Stock awards and option exercises | 3 | 5,337 | 22,164 | 27,504 | |||
Cash dividends declared on common stock | (21,377) | (21,377) | |||||
Treasury stock purchased | (15,000) | (15,000) | |||||
Balance at Mar. 31, 2019 | 1,413,453 | (319,795) | 676 | (327,871) | 700,933 | 318 | 1,467,714 |
Balance at Dec. 31, 2019 | 1,523,820 | (341,948) | 686 | (381,238) | 770,596 | 336 | 1,572,252 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Income | 55,253 | (3) | 55,250 | ||||
Adoption of accounting standards | Accounting Standards Update 2016-13 | (1,377) | (1,377) | |||||
Foreign currency translation adjustments | (42,229) | (42,229) | |||||
Changes in unrecognized pension gains (losses) and related amortization, net of tax | 1,636 | 1,636 | |||||
Changes in derivative gains (losses), net of tax | 1,483 | 1,483 | |||||
Stock awards and option exercises | 3 | 8,665 | 14,971 | 23,639 | |||
Cash dividends declared on common stock | (23,031) | (23,031) | |||||
Balance at Mar. 31, 2020 | $ 1,554,665 | $ (381,058) | $ 689 | $ (372,573) | $ 785,567 | $ 333 | $ 1,587,623 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net income | $ 55,250 | $ 62,999 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation | 42,792 | 41,487 |
Amortization | 8,014 | 6,002 |
Stock based compensation | 9,141 | 6,565 |
Provision for CECL | 1,251 | 497 |
(Gain) loss on disposition of fixed assets | 54 | 310 |
Deferred income taxes | 6 | 671 |
Defined benefit plan expense | 5,775 | 3,858 |
Equity in results of affiliates | 799 | 95 |
Changes in balance sheet items, excluding effects from acquisitions and foreign currency adjustments: | ||
Accounts and other receivables | (64,764) | (35,301) |
Inventories | (8,615) | (13,097) |
Prepaid and other current assets | (11,787) | (2,282) |
Accounts payable, accrued and other liabilities | 45,458 | 6,865 |
Income taxes payable | (5,278) | 3,511 |
Retirement and deferred compensation plan liabilities | (1,312) | (5,940) |
Other changes, net | 8,249 | 1,396 |
Net Cash Provided by Operations | 85,033 | 77,636 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (61,625) | (51,742) |
Proceeds from sale of property, plant and equipment | 166 | 178 |
Acquisition of business, release of escrow | (1,463) | (4,036) |
Acquisition of intangible assets | (3,955) | (221) |
Investment in equity securities | (20,423) | |
Proceeds from sale of investment in equity securities | 16,487 | |
Notes receivable, net | (785) | 231 |
Net Cash Used by Investing Activities | (88,085) | (39,103) |
Cash Flows from Financing Activities: | ||
Proceeds from notes payable and overdrafts | 8,148 | 16,783 |
Repayments of notes payable and overdrafts | (2,030) | (21,130) |
Proceeds and repayments of short term credit facility, net | 175,000 | (78,222) |
Proceeds from long-term obligations | 10,446 | |
Repayments of long-term obligations | (2,386) | (3,227) |
Dividends paid | (23,031) | (21,377) |
Proceeds from stock option exercises | 18,602 | 20,939 |
Purchase of treasury stock | (15,000) | |
Net Cash Provided (Used) by Financing Activities | 174,303 | (90,788) |
Effect of Exchange Rate Changes on Cash | (3,381) | 2,809 |
Net Increase (Decrease) in Cash and Equivalents and Restricted Cash | 167,870 | (49,446) |
Cash and Equivalents and Restricted Cash at Beginning of Period | 246,973 | 266,823 |
Cash and Equivalents and Restricted Cash at End of Period | $ 414,843 | $ 217,377 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Restricted cash included in the line item prepaid and other on the Condensed Consolidated Balance Sheets as shown below represents amounts held in escrow. | ||||
Cash and equivalents | $ 410,840 | $ 241,970 | $ 217,377 | |
Restricted cash included in prepaid and other | 4,003 | |||
Total Cash and Equivalents and Restricted Cash shown in the Statement of Cash Flows | $ 414,843 | $ 246,973 | $ 217,377 | $ 266,823 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup”, “Aptar”, “Company”, “we”, “us” or “our” as used herein refer to AptarGroup, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the unaudited Condensed Consolidated Financial Statements (the “Condensed Consolidated Financial Statements”) include all normal recurring adjustments necessary for a fair statement of consolidated financial position, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. The accompanying Condensed Consolidated Financial Statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. Also, certain financial position data included herein was derived from the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 but does not include all disclosures required by U.S. GAAP. Accordingly, these Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations of any interim period are not necessarily indicative of the results that may be expected for the year. There are many uncertainties regarding the current COVID-19 pandemic, including the scope of scientific and health issues, the anticipated duration of the pandemic and the extent of local and worldwide social, political and economic disruption it may cause. The pandemic has impacted our business, operations and financial results during the quarter ended March 31, 2020 including an overall reduction to net sales. No impairments were recorded as of March 31, 2020. While the disruption is currently expected to be temporary, there is uncertainty around the duration. Due to significant uncertainty surrounding the situation, our judgment regarding future results could change and therefore our results could be materially impacted. ADOPTION OF RECENT ACCOUNTING STANDARDS Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification. Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the FASB in June 2016, as well as the clarifying amendments subsequently issued. We applied the guidance using a modified retrospective approach and accordingly recognized an amount of $1.4 million as the cumulative adjustment to opening retained earnings in the first quarter of 2020. This is based on management's best estimates of specific losses on individual exposures particularly on current trade receivables, as well as the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. On an ongoing basis, we will contemplate forward-looking economic conditions in recording lifetime expected credit losses for our financial assets measured at cost, such as our trade receivables and certain other assets. In January 2017, the FASB issued ASU 2017-04, which provides guidance to simplify how an entity is required to test goodwill for impairm ent by eliminating Step 2 from the goodwill impairment test. As a result, impairment charges are required for the amount by which a reporting unit’s carrying amount exceeds its fair value up to the amount of its allocated goodwill. We adopted the standard on January 1, 2020 and did not record any impairment charges. In August 2018, the FASB issued ASU 2018-15 to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. We adopted the standard on January 1, 2020 and no material impacts were noted. In August 2018, the FASB issued ASU 2018-13, which amends disclosure requirements for fair value measurements. The new standard modifies disclosure requirements including removing requirements to disclose the valuation process for Level 3 measurements and adding requirements to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. We adopted the standard on January 1, 2020 and no material impacts were noted. Other accounting standards that have been issued by the FASB or other standards-setting bodies did not have a material impact on our Condensed Consolidated Financial Statements. INCOME TAXES We compute taxes on income in accordance with the tax rules and regulations of the many taxing authorities where the income is earned. The income tax rates imposed by these taxing authorities may vary substantially. Taxable income may differ from pre-tax income for financial accounting purposes. To the extent that these differences create timing differences between the tax basis of an asset or liability and our reported amount in the financial statements, an appropriate provision for deferred income taxes is made. We maintain our assertion that the cash and distributable reserves at our non-U.S. affiliates are indefinitely reinvested. Under current U.S. tax laws, all of our non-U.S. earnings are subject to U.S. taxation. We will provide for the necessary withholding and local income taxes when management decides that an affiliate should make a distribution. These decisions are made taking into consideration the financial requirements of the non-U.S. affiliates and the global cash management goals of the Company. We provide a liability for the amount of unrecognized tax benefits from uncertain tax positions. This liability is provided whenever we determine that a tax benefit will not meet a more-likely-than-not threshold for recognition. The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisdictions. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner inconsistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. The resolution of each of these audits is not expected to be material to our Condensed Consolidated Financial Statements. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2020 | |
REVENUE. | |
REVENUE | NOTE 2 – REVENUE At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, we allocate the total contract consideration to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when (or as) the performance obligations are satisfied (i.e., when the customer obtains control of the good or service). The majority of our revenues are derived from product and tooling sales; however, we also receive revenues from service, license, exclusivity and royalty arrangements, which collectively are not material to the year-to-date results. Revenue by segment and geography for the three months ended March 31, 2020 and 2019 is as follows: For the Three Months Ended March 31, 2020 Latin Segment Europe Domestic America Asia Total Beauty + Home $ 186,950 $ 81,845 $ 36,181 $ 19,584 $ 324,560 Pharma 190,130 90,965 6,579 9,522 297,196 Food + Beverage 28,769 57,590 8,034 5,404 99,797 Total $ 405,849 $ 230,400 $ 50,794 $ 34,510 $ 721,553 For the Three Months Ended March 31, 2019 Latin Segment Europe Domestic America Asia Total Beauty + Home $ 216,233 $ 86,979 $ 42,642 $ 21,805 $ 367,659 Pharma 184,174 71,772 7,656 9,099 272,701 Food + Beverage 30,961 55,120 7,884 10,135 104,100 Total $ 431,368 $ 213,871 $ 58,182 $ 41,039 $ 744,460 We perform our obligations under a contract with a customer by transferring goods and/or services in exchange for consideration from the customer. The timing of performance will sometimes differ from the timing of the receipt of the associated consideration from the customer, thus resulting in the recognition of a contract asset or a contract liability. We recognize a contract asset when we transfer control of goods or services to a customer prior to invoicing for the related performance obligation. The contract asset is transferred to accounts receivable when the product is shipped and invoiced to the customer. We recognize a contract liability if the customer's payment of consideration precedes the entity's performance. The opening and closing balances of our contract asset and contract liabilities are as follows: Balance as of Balance as of Increase/ December 31, 2019 March 31, 2020 (Decrease) Contract asset (current) $ 16,245 $ 13,457 $ (2,788) Contract asset (long-term) $ — $ — $ — Contract liability (current) $ 79,305 $ 78,974 $ (331) Contract liability (long-term) $ 9,779 $ 14,994 $ 5,215 The differences in the opening and closing balances of our contract asset and contract liabilities are primarily the result of timing differences between our performance and the customer’s payment. The total amount of revenue recognized during the current year against contract liabilities is $12.5 million, including $10.6 million relating to contract liabilities at the beginning of the year. Determining the Transaction Price In most cases, the transaction price for each performance obligation is stated in the contract. In determining the variable amounts of consideration within the transaction price (such as volume-based customer rebates), we include an estimate of the expected amount of consideration as revenue. We apply the expected value method based on all of the information (historical, current, and forecast) that is reasonably available and identify reasonable estimates based on this information. We apply the method consistently throughout the contract when estimating the effect of an uncertainty on the amount of variable consideration to which we will be entitled. Product Sales We primarily manufacture and sell dispensing, sealing and active packaging solutions. The amount of consideration is typically fixed for such customers. At the time of delivery, the customer is invoiced the agreed-upon price. Revenue from product sales is typically recognized upon manufacture or shipment, when control of the goods transfers to the customer. To determine when the control transfers, we typically assess, among other things, the shipping terms of the contract, shipping being one of the indicators of transfer of control. A majority of product sales are sold free on board (“FOB”) shipping point. For FOB shipping point shipments, control of the goods transfers to the customer at the time of shipment of the goods. Therefore, our performance obligation is satisfied at the time of shipment. We have elected to account for shipping and handling costs that occur after the customer has obtained control of a good as fulfillment costs rather than as a promised service. We do not have any material significant payment terms as payment is typically received shortly after the point of sale. There also exist instances where we manufacture highly customized products that have no alternative use to us and for which we have an enforceable right to payment for performance completed to date. For these products, we transfer control and recognize revenue over time by measuring progress towards completion using the Output Method based on the number of products produced. As we normally make our products to a customer’s order, the time between production and shipment of our products is typically within a few weeks. As a part of our customary business practice, we offer a standard warranty that the products will materially comply with the technical specifications and will be free from material defects. Because such warranties are not sold separately, do not provide for any service beyond a guarantee of a product’s initial specifications, and are not required by law, there is no revenue deferral for these types of warranties. Tooling Sales We also build, or contract to build molds and other tools (collectively defined as “tooling”) necessary to produce our products. As with product sales, we recognize revenue when control of the tool transfers to the customer. If the tooling is highly customized with no alternative use to us and we have an enforceable right to payment for performance completed to date, we transfer control and recognize revenue over time by measuring progress towards completion using the Input Method based on costs incurred relative to total estimated costs to completion. Otherwise, revenue for the tooling is recognized at the point in time when the customer approves the tool. We do not have any material significant payment terms as payment is typically either received during the mold-build process or shortly after completion. In certain instances, we offer extended warranties on tools sold to our customers above and beyond the normal standard warranties. We normally receive payment at the inception of the contract and recognize revenue over the term of the contract. At December 31, 2019, $515 thousand of unearned revenue associated with outstanding contracts was reported in Accounts Payable, Accrued and Other Liabilities. At March 31, 2020, the unearned amount was $432 thousand. We expect to recognize approximately $172 thousand of the unearned amount during the remainder of 2020, $123 thousand in 2021, and $137 thousand thereafter. Credit Risk We are exposed to credit losses primarily through our product sales, tooling sales and services to our customers. We assess each customer’s ability to pay for the products we sell by conducting a credit review. The credit review considers our expected billing exposure and timing for payment and the customer’s established credit rating or our assessment of the customer’s creditworthiness based on our analysis of their financial statements when a credit rating is not available. We also consider contract terms and conditions, country and political risks, and business strategy in our evaluation. A credit limit is established for each customer based on the outcome of this review. We monitor our ongoing credit exposure through active review of customer balances against contract terms and due dates. Our activities include timely account reconciliation, dispute resolution and payment confirmation. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. At March 31, 2020, we reported $602 million of accounts receivable, net of CECL of $5.7 million. Changes in the allowance were not material for the three months ended March 31, 2020. Current uncertainty in credit and market conditions due to the COVID-19 pandemic may slow our collection efforts if customers experience significant difficulty accessing credit and paying their obligations, which may lead to higher than normal accounts receivable and increased CECL charges. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2020 | |
INVENTORIES | |
INVENTORIES | NOTE 3 - INVENTORIES Inventories, by component, consisted of: March 31, December 31, 2020 2019 Raw materials $ 106,787 $ 111,653 Work in process 120,151 123,750 Finished goods 144,921 140,392 Total $ 371,859 $ 375,795 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill by reporting segment since December 31, 2019 are as follows: Beauty + Food + Corporate Home Pharma Beverage & Other Total Goodwill $ 221,658 $ 413,650 $ 128,153 $ 1,615 $ 765,076 Accumulated impairment losses — — — (1,615) (1,615) Balance as of December 31, 2019 $ 221,658 $ 413,650 $ 128,153 $ — $ 763,461 Acquisition — 463 — — 463 Foreign currency exchange effects (2,201) (5,543) (99) — (7,843) Goodwill $ 219,457 $ 408,570 $ 128,054 $ 1,615 $ 757,696 Accumulated impairment losses — — — (1,615) (1,615) Balance as of March 31, 2020 $ 219,457 $ 408,570 $ 128,054 $ — $ 756,081 The table below shows a summary of intangible assets as of March 31, 2020 and December 31, 2019. March 31, 2020 December 31, 2019 Weighted Average Gross Gross Amortization Period Carrying Accumulated Net Carrying Accumulated Net (Years) Amount Amortization Value Amount Amortization Value Amortized intangible assets: Patents 7.9 $ 3,001 (1,304) $ 1,697 $ 2,804 $ (1,318) $ 1,486 Acquired technology 13.0 99,437 (27,143) 72,294 100,511 (25,430) 75,081 Customer relationships 13.7 216,198 (37,774) 178,424 217,934 (33,924) 184,010 Trademarks and trade names 6.9 34,131 (11,919) 22,212 35,015 (11,003) 24,012 License agreements and other 17.6 19,671 (10,177) 9,494 16,153 (9,658) 6,495 Total intangible assets 13.0 $ 372,438 $ (88,317) $ 284,121 $ 372,417 $ (81,333) $ 291,084 Aggregate amortization expense for the intangible assets above for the quarters ended March 31, 2020 and 2019 was $8,014 and $6,002, respectively. Future estimated amortization expense for the years ending December 31 is as follows: 2020 $ 20,725 (remaining estimated amortization for 2020) 2021 27,154 2022 26,915 2023 26,835 2024 and thereafter 182,492 Future amortization expense may fluctuate depending on changes in foreign currency rates. The estimates for amortization expense noted above are based upon foreign exchange rates as of March 31, 2020. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 5 – INCOME TAXES The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings and related estimated full year-taxes, adjusted for the impact of discrete quarterly items. The effective tax rate for the three months ended March 31, 2020 and 2019, respectively, was 29.2% and 30.0% . |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2020 | |
DEBT | |
DEBT | NOTE 6 – DEBT Notes Payable, Revolving Credit Facility and Overdrafts At March 31, 2020 and December 31, 2019, our notes payable, revolving credit facility and overdrafts, consisted of the following: March 31, December 31, 2020 2019 Notes payable 8.10% due in 2020 $ 2,664 $ 1,436 Revolving credit facility 1.88% due in 2020 200,000 25,000 Overdrafts 5.68% - 7.82% due in 2020 17,847 17,823 $ 220,511 $ 44,259 We maintain a multi-currency revolving credit facility with two tranches that matures in July 2022 which provides for unsecured financing of up to $300 million that is available in the U.S. and up to €150 million that is available to our wholly-owned UK subsidiary. $200.0 million was utilized under our U.S. facility and no balance was utilized under our euro-based revolving credit facility as of March 31, 2020. $25.0 million was utilized under our U.S. facility and no balance was utilized on our euro-based revolving credit facility as of December 31, 2019. There are no compensating balance requirements associated with our revolving credit facility. Each borrowing under the credit facility will bear interest at rates based on LIBOR, prime rates or other similar rates, in each case plus an applicable margin. A facility fee on the total amount of the facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the credit facility and the facility fee percentage may change from time to time depending on changes in our consolidated leverage ratio. Long-Term Obligations At March 31, 2020, our long-term obligations consisted of the following: Unamortized Debt Issuance Principal Costs Net Notes payable 0.00% – 10.90%, due in monthly and annual installments through 2028 $ 15,551 $ — $ 15,551 Senior unsecured notes 3.2%, due in 2022 75,000 59 74,941 Senior unsecured debts 3.1% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022 168,000 352 167,648 Senior unsecured notes 3.5%, due in 2023 125,000 135 124,865 Senior unsecured notes 1.0%, due in 2023 110,315 341 109,974 Senior unsecured notes 3.4%, due in 2024 50,000 60 49,940 Senior unsecured notes 3.5%, due in 2024 100,000 135 99,865 Senior unsecured notes 1.2%, due in 2024 220,630 701 219,929 Senior unsecured notes 3.6%, due in 2025 125,000 157 124,843 Senior unsecured notes 3.6%, due in 2026 125,000 157 124,843 Finance Lease Liabilities 28,395 — 28,395 $ 1,142,891 $ 2,097 $ 1,140,794 Current maturities of long-term obligations (65,049) — (65,049) Total long-term obligations $ 1,077,842 $ 2,097 $ 1,075,745 At December 31, 2019, our long-term obligations consisted of the following: Unamortized Debt Issuance Principal Costs Net Notes payable 0.00% – 10.90%, due in monthly and annual installments through 2028 $ 19,220 $ — $ 19,220 Senior unsecured notes 3.2%, due in 2022 75,000 64 74,936 Senior unsecured debts 3.2% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022 168,000 390 167,610 Senior unsecured notes 3.5%, due in 2023 125,000 144 124,856 Senior unsecured notes 1.0%, due in 2023 112,170 356 111,814 Senior unsecured notes 3.4%, due in 2024 50,000 63 49,937 Senior unsecured notes 3.5%, due in 2024 100,000 144 99,856 Senior unsecured notes 1.2%, due in 2024 224,340 742 223,598 Senior unsecured notes 3.6%, due in 2025 125,000 169 124,831 Senior unsecured notes 3.6%, due in 2026 125,000 169 124,831 Finance Lease Liabilities 29,952 — 29,952 $ 1,153,682 $ 2,241 $ 1,151,441 Current maturities of long-term obligations (65,988) — (65,988) Total long-term obligations $ 1,087,694 $ 2,241 $ 1,085,453 The aggregate long-term maturities, excluding finance lease liabilities, which are disclosed in Note 7, due annually from the current balance sheet date for the next five years are $61,181, $60,285, $134,343, $337,444, $270,846 and $250,397 thereafter. Covenants Our revolving credit facility and corporate long-term obligations require us to satisfy certain financial and other covenants including: Requirement Level at March 31, 2020 Consolidated Leverage Ratio (1) Maximum 1.73 to 1.00 Consolidated Interest Coverage Ratio (1) Minimum of 3.00 to 1.00 16.32 to 1.00 (1) Definitions of ratios are included as part of the revolving credit facility agreement and the note purchase agreements. |
LEASE COMMITMENTS
LEASE COMMITMENTS | 3 Months Ended |
Mar. 31, 2020 | |
LEASE COMMITMENTS | |
LEASE COMMITMENTS | NOTE 7 – LEASES We lease certain warehouse, plant and office facilities as well as certain equipment under noncancelable operating and finance leases expiring at various dates through the year 2032. Most of the operating leases contain renewal options and certain leases include options to purchase the related asset during or at the end of the lease term. Amortization expense related to finance leases is included in depreciation expense while rent expense related to operating leases is included within cost of sales and selling research & development and administrative expenses (“SG&A”). The components of lease expense for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, 2020 2019 Operating lease cost $ 5,254 $ 6,004 Finance lease cost: Amortization of right-of-use assets $ 1,199 $ 872 Interest on lease liabilities 348 315 Total finance lease cost $ 1,547 $ 1,187 Short-term lease and variable lease costs $ 2,448 $ 1,942 Supplemental cash flow information related to leases was as follows: Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,328 $ 6,469 Operating cash flows from finance leases 369 243 Financing cash flows from finance leases 1,657 1,140 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,233 $ 4,515 Finance leases 220 10,697 |
RETIREMENT AND DEFERRED COMPENS
RETIREMENT AND DEFERRED COMPENSATION PLANS | 3 Months Ended |
Mar. 31, 2020 | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | NOTE 8 – RETIREMENT AND DEFERRED COMPENSATION PLANS Components of Net Periodic Benefit Cost: Domestic Plans Foreign Plans Three Months Ended March 31, 2020 2019 2020 2019 Service cost $ 3,577 $ 2,773 $ 1,768 $ 1,460 Interest cost 1,987 1,845 340 501 Expected return on plan assets (3,422) (3,094) (634) (592) Amortization of net loss 1,548 489 514 363 Amortization of prior service cost — — 97 113 Net periodic benefit cost $ 3,690 $ 2,013 $ 2,085 $ 1,845 The components of net periodic benefit cost, other than the service cost component, are included in the line “Miscellaneous, net” in the income statement. EMPLOYER CONTRIBUTIONS Although we have no minimum funding requirement, we contributed $204 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME Changes in Accumulated Other Comprehensive (Loss) Income by Component: Foreign Defined Benefit Currency Pension Plans Derivatives Total Balance - December 31, 2018 $ (248,401) $ (60,463) $ (1,640) $ (310,504) Other comprehensive (loss) income before reclassifications (9,619) — 5,738 (3,881) Amounts reclassified from accumulated other comprehensive income (loss) — 721 (6,131) (5,410) Net current-period other comprehensive (loss) income (9,619) 721 (393) (9,291) Balance - March 31, 2019 $ (258,020) $ (59,742) $ (2,033) $ (319,795) Balance - December 31, 2019 $ (257,124) $ (83,147) $ (1,677) $ (341,948) Other comprehensive (loss) income before reclassifications (42,229) — 5,026 (37,203) Amounts reclassified from accumulated other comprehensive income (loss) — 1,636 (3,543) (1,907) Net current-period other comprehensive (loss) income (42,229) 1,636 1,483 (39,110) Balance - March 31, 2020 $ (299,353) $ (81,511) $ (194) $ (381,058) Reclassifications Out of Accumulated Other Comprehensive (Loss) Income: Amount Reclassified from Details about Accumulated Other Accumulated Other Affected Line in the Statement Comprehensive Income Components Comprehensive Income Where Net Income is Presented Three Months Ended March 31, 2020 2019 Defined Benefit Pension Plans Amortization of net loss $ 2,062 $ 852 (1) Amortization of prior service cost 97 113 (1) 2,159 965 Total before tax (523) (244) Tax benefit $ 1,636 $ 721 Net of tax Derivatives Changes in cross currency swap: interest component $ (763) $ (1,454) Interest Expense Changes in cross currency swap: foreign exchange component (2,780) (4,677) Miscellaneous, net $ (3,543) $ (6,131) Net of tax Total reclassifications for the period $ (1,907) $ (5,410) (1) These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax. See Note 8 – Retirement and Deferred Compensation Plans for additional details. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2020 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 10 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We maintain a foreign exchange risk management policy designed to establish a framework to protect the value of our non-functional denominated transactions from adverse changes in exchange rates. Sales of our products can be denominated in a currency different from the currency in which the related costs to produce the product are denominated. Changes in exchange rates on such inter-country sales or intercompany loans can impact our results of operations. Our policy is not to engage in speculative foreign currency hedging activities, but to minimize our net foreign currency transaction exposure, defined as firm commitments and transactions recorded and denominated in currencies other than the functional currency. We may use foreign currency forward exchange contracts, options and cross currency swaps to economically hedge these risks. For derivative instruments designated as hedges, we formally document the nature and relationships between the hedging instruments and the hedged items, as well as the risk management objectives, strategies for undertaking the various hedge transactions, and the method of assessing hedge effectiveness at inception. Quarterly thereafter, we formally assess whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. Additionally, in order to designate any derivative instrument as a hedge of an anticipated transaction, the significant characteristics and expected terms of any anticipated transaction must be specifically identified, and it must be probable that the anticipated transaction will occur. All derivative financial instruments used as hedges are recorded at fair value in the Condensed Consolidated Balance Sheets. See Note 11 - Fair Value for additional details. Cash Flow Hedge For derivative instruments that are designated and qualify as cash flow hedges, the changes in fair values are recorded in accumulated other comprehensive loss and included in changes in derivative gain/loss. The changes in the fair values of derivatives designated as cash flow hedges are reclassified from accumulated other comprehensive loss to net income when the underlying hedged item is recognized in earnings. Cash flows from the settlement of derivative contracts designated as cash flow hedges offset cash flows from the underlying hedged items and are included in operating activities in the Condensed Consolidated Statements of Cash Flows. During 2017, our wholly-owned UK subsidiary borrowed $280 million in term loan borrowings under a new credit facility. In order to mitigate the currency risk of U.S. dollar debt on a euro functional currency entity and to mitigate the risk of variability in interest rates, we entered into a cross currency swap in the notional amount of $280 million to effectively hedge the foreign exchange and interest rate exposure on the $280 million term loan. This EUR/USD swap agreement fixed our U.S. dollar floating-rate debt to 1.36% euro fixed-rate debt. Related to this hedge, approximately $0.2 million of loss is included in accumulated other comprehensive loss at March 31, 2020. The amount expected to be recognized into earnings during the next 12 months related to the interest component of our cross currency swap based on prevailing foreign exchange and interest rates at March 31, 2020 is $2.2 million. The amount expected to be recognized into earnings during the next 12 months related to the foreign exchange component of our cross currency swap is dependent on fluctuations in currency exchange rates. As of March 31, 2020, the fair values of the cross currency swap were a $6.8 million asset. The swap contract expires on July 20, 2022. Hedge of Net Investments in Foreign Operations A significant number of our operations are located outside of 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 our foreign subsidiaries. A strengthening U.S. dollar relative to foreign currencies has a dilutive translation effect on our financial condition and results of operations. Conversely, a weakening U.S. dollar has an additive effect. In some cases, we maintain debt in these subsidiaries to offset the net asset exposure. We do not otherwise actively manage this risk using derivative financial instruments. In the event we plan on a full or partial liquidation of any of our foreign subsidiaries where our net investment is likely to be monetized, we will consider hedging the currency exposure associated with such a transaction. Other As of March 31, 2020, we have recorded the fair value of foreign currency forward exchange contracts of $2.1 million in prepaid and other and $0.5 million in accounts payable and accrued liabilities on the balance sheet. All forward exchange contracts outstanding as of March 31, 2020 had an aggregate notional contract amount of $56.1 million. Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 March 31, 2020 December 31, 2019 Derivatives Derivatives Derivatives not Derivatives not Designated Designated Designated Designated Balance Sheet as Hedging as Hedging as Hedging as Hedging Location Instruments Instruments Instruments Instruments Derivative Assets Foreign Exchange Contracts Prepaid and other $ — $ 2,061 $ — $ 206 Cross Currency Swap Contract (1) Prepaid and other 6,769 — 2,552 — $ 6,769 $ 2,061 $ 2,552 $ 206 Derivative Liabilities Foreign Exchange Contracts Accounts payable, accrued and other liabilities $ — $ 505 $ — $ 401 $ — $ 505 $ — $ 401 (1) This cross currency swap contract is composed of both an interest component and a foreign exchange component. The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Three Months Ended March 31, 2020 and 2019 Amount of Gain (Loss) Total Amount Amount of Gain (Loss) Location of (Loss) Reclassified from of Affected Derivatives in Cash Recognized in Gain Recognized Accumulated Income Flow Hedging Other Comprehensive in Income on Other Comprehensive Statement Relationships Income on Derivative Derivatives Income on Derivative Line Item 2020 2019 2020 2019 Cross currency swap contract: Interest component $ 2,246 $ 1,392 Interest expense $ 763 $ 1,454 $ (8,388) Foreign exchange component 2,780 4,677 Miscellaneous, net 2,780 4,677 (1,412) $ 5,026 $ 6,069 $ 3,543 $ 6,131 The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2020 and 2019 Amount of (Loss) Gain Derivatives Not Designated Location of (Loss) Gain Recognized Recognized in Income as Hedging Instruments in Income on Derivatives on Derivatives 2020 2019 Foreign Exchange Contracts Other (Expense) Income: $ 1,747 $ (263) $ 1,747 $ (263) Gross Amounts not Offset Gross Amounts Net Amounts in the Statement of Offset in the Presented in Financial Position Gross Statement of the Statement of Financial Cash Collateral Net Amount Financial Position Financial Position Instruments Received Amount Description March 31, 2020 Derivative Assets $ 8,830 — $ 8,830 — — $ 8,830 Total Assets $ 8,830 — $ 8,830 — — $ 8,830 Derivative Liabilities $ 505 — $ 505 — — $ 505 Total Liabilities $ 505 — $ 505 — — $ 505 December 31, 2019 Derivative Assets $ 2,758 — $ 2,758 — — $ 2,758 Total Assets $ 2,758 — $ 2,758 — — $ 2,758 Derivative Liabilities $ 401 — $ 401 — — $ 401 Total Liabilities $ 401 — $ 401 — — $ 401 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE | |
FAIR VALUE | NOTE 11 – FAIR VALUE Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: ● Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. ● Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. ● Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. As of March 31, 2020, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (1) $ 2,061 $ — $ 2,061 $ — Cross currency swap contract (1) 6,769 — 6,769 — Total assets at fair value $ 8,830 $ — $ 8,830 $ — Liabilities Foreign exchange contracts (1) $ 505 $ — $ 505 $ — Contingent consideration obligation 5,930 — — 5,930 Total liabilities at fair value $ 6,435 $ — $ 505 $ 5,930 As of December 31, 2019, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (1) $ 206 $ — $ 206 $ — Cross currency swap contract (1) 2,552 — 2,552 — Total assets at fair value $ 2,758 $ — $ 2,758 $ — Liabilities Foreign exchange contracts (1) $ 401 $ — $ 401 $ — Contingent consideration obligation 5,930 — — 5,930 Total liabilities at fair value $ 6,331 $ — $ 401 $ 5,930 (1) Market approach valuation technique based on observable market transactions of spot and forward rates. The carrying amounts of our other current financial instruments such as cash and equivalents, accounts and notes receivable, notes payable and current maturities of long-term obligations approximate fair value due to the short-term maturity of the instruments. We consider our long-term obligations a Level 2 liability and utilize the market approach valuation technique based on interest rates that are currently available to us for issuance of debt with similar terms and maturities. The estimated fair value of our long-term obligations was $1.0 billion as of March 31, 2020 and $1.1 billion as of December 31, 2019. As discussed in Note 17 - Acquisitions, we have a contingent consideration obligation to the selling equity holders of Noble in connection with the Noble Acquisition (as defined herein) based on 2024 cumulative performance targets and a contingent consideration obligation to the selling equity holder of Gateway in connection with the Gateway Acquisition (as defined herein) based on 2020 and 2022 performance targets. We consider these obligations a Level 3 liability and have estimated the aggregate fair value for these contingent consideration arrangements to be $2.9 million and $3.0 million, respectively, as of March 31, 2020 and December 31, 2019. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 - COMMITMENTS AND CONTINGENCIES The Company, in the normal course of business, is subject to a number of lawsuits and claims both actual and potential in nature. While management believes the resolution of these claims and lawsuits will not have a material adverse effect on our financial position, results of operations or cash flows, claims and legal proceedings are subject to inherent uncertainties, and unfavorable outcomes could occur and could include amounts in excess of any accruals which management has established. Were such unfavorable final outcomes to occur, it is possible that they could have a material adverse effect on our financial position, results of operations and cash flows. Under our Certificate of Incorporation, we have agreed to indemnify our officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have a directors and officers liability insurance policy that covers a portion of our exposure. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. We have no liabilities recorded for these agreements as of March 31, 2020 and December 31, 2019. A fire caused damage to our facility in Annecy, France in June 2016. We are insured for the damages caused by the fire, including business interruption insurance. For the three months ended March 31, 2020, we did not receive any insurance proceeds, and have no insurance receivable as of March 31, 2020. During the three months ended March 31, 2020 and 2019, profitability was not impacted. The final settlement continues to be negotiated. In many cases, our insurance coverage exceeds the amount of our recognized losses. However, no gain contingencies were recognized during the three months ended March 31, 2020 as our ability to realize those gains remains uncertain. An environmental investigation, undertaken to assess areas of possible contamination, was completed at our facility in Jundiaí, São Paulo, Brazil. The facility is primarily an internal supplier of anodized aluminum components for certain of our dispensing systems. The testing indicated that soil and groundwater in certain areas of the facility were impacted above acceptable levels established by local regulations. In March 2017, we reported the findings to the relevant environmental authority, the Environmental Company of the State of São Paulo – CETESB. Based upon our best estimate, we recorded a reserve of $1.5 million (operating expense) in the first quarter of 2017 related to this contingency. During 2019, we paid approximately $0.6 million. For the three months ended March 31, 2020, we paid approximately $0.1 million and made adjustments to the accrual based on our future anticipated expenditures. As of March 31, 2020, our outstanding reserve is $0.4 million. The ultimate loss associated with this environmental contingency is subject to the investigation and ongoing review of the CETESB. We will continue to evaluate the range of likely costs as the investigation proceeds and we have further clarity on the nature and extent of remediation that will be required. We note that the contamination, or any failure to complete any required remediation in a timely manner, could potentially result in fines or penalties. In March 2017, the Supreme Court of Brazil issued a decision that a certain state value added tax should not be included in the calculation of federal gross receipts taxes. The decision reduces our gross receipts tax in Brazil prospectively and, potentially, retrospectively. During the first quarter of 2019, we received a favorable court decision of $2.7 million for the retrospective right to recover part of our claim. This amount is recorded in cost of sales as a favorable impact of $1.7 million and $1.0 million was recognized as interest income. If the Judicial Court grants full retrospective recovery, we estimate remaining potential recoveries of approximately $2 million to $8 million, including interest, depending on the future decisions of the Supreme Court of Brazil. Due to uncertainties around our remaining court recovery claims, we have not recorded any further amounts relating to the retrospective nature of this matter. In December 2019, tax authorities in Brazil notified us of a tax assessment of approximately $6.1 million, including interest and penalties of $2.3 million and $0.8 million, respectively, relating to differences in tax classification codes used for import duties for the period from January 2015 to August 2018. We are vigorously contesting the assessment, including interest and penalties, and have filed an administrative defense appeal in December 2019. Considering the complex nature of the assessment, we expect the appeal process to go through different levels of administrative and/or judicial review. Accordingly, due to uncertainty of the timing and amounts of assessment, no liability is recorded as of March 31, 2020. |
STOCK REPURCHASE PROGRAM
STOCK REPURCHASE PROGRAM | 3 Months Ended |
Mar. 31, 2020 | |
STOCK REPURCHASE PROGRAM | |
STOCK REPURCHASE PROGRAM | NOTE 13 – STOCK REPURCHASE PROGRAM On April 18, 2019, we announced a share repurchase authorization of up to $350 million of common stock. This authorization replaces previous authorizations and has no expiration date. We may repurchase shares through the open market, privately negotiated transactions or other programs, subject to market conditions. During the three months ended March 31, 2020, we did not repurchase any shares. During the three months ended March 31, 2019, the Company repurchased approximately 159 thousand shares for approximately $15.0 million. As of March 31, 2020, there was $278.5 million of authorized share repurchases available to us. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 14 – STOCK-BASED COMPENSATION We issue restricted stock units (“RSUs”), which consist of time-based and performance-based awards, to employees under stock awards plans approved by stockholders. In addition, RSUs are issued to non-employee directors under a Restricted Stock Unit Award Agreement for Directors pursuant to the Company’s 2018 Equity Incentive Plan. RSUs granted to employees vest according to a specified performance period and/or vesting period. Time-based RSUs generally vest over three years. Performance-based RSUs vest at the end of the specified performance period, generally three years, assuming required performance or market vesting conditions are met. Performance-based RSUs have one of two vesting conditions: (1) based on our internal financial performance metrics and (2) based on our total shareholder return (“TSR”) relative to total shareholder returns of an industrial peer group. At the time of vesting, the vested shares of common stock are issued in the employee’s name. In addition, RSU awards are generally net settled (shares are withheld to cover the employee tax obligation). RSUs granted to directors are only time-based and generally vest over one year. The fair value of both time-based RSUs and performance-based RSUs pertaining to internal performance metrics is determined using the closing price of our common stock on the grant date. The fair value of performance-based RSUs pertaining to TSR is estimated using a Monte Carlo simulation. Inputs and assumptions used to calculate the fair value are shown in the table below. The fair value of these RSUs is expensed over the vesting period using the straight-line method or using the graded vesting method when an employee becomes eligible to retain the award at retirement. Three Months Ended March 31, 2020 2019 Fair value per stock award $ 94.98 $ 134.97 Grant date stock price $ 83.93 $ 104.51 Assumptions: Aptar's stock price expected volatility 23.80 % 16.50 % Expected average volatility of peer companies 48.50 % 31.90 % Correlation assumption 63.50 % 37.40 % Risk-free interest rate 0.31 % 2.19 % Dividend yield assumption 1.72 % 1.30 % A summary of RSU activity as of March 31, 2020 and changes during the three month period then ended is presented below: Time-Based RSUs Performance-Based RSUs Weighted Average Weighted Average Units Grant-Date Fair Value Units Grant-Date Fair Value Nonvested at January 1, 2020 480,729 $ 95.45 181,680 $ 117.26 Granted 176,424 81.75 206,408 90.85 Vested (112,515) 82.64 — — Forfeited (217) 100.14 (589) 120.61 Nonvested at March 31, 2020 544,421 $ 92.11 387,499 $ 103.23 Included in the March 31, 2020 time-based RSUs are 11,490 units granted to non-employee directors. Compensation expense recorded attributable to RSUs for the first three months of 2020 and 2019 was approximately $8.3 million and $4.7 million, respectively. The actual tax benefit realized for the tax deduction from RSUs was approximately $1.5 million in the three months ended March 31, 2020. The fair value of units vested during the three months ended March 31, 2020 and 2019 was $9.3 million and $2.7 million, respectively. The intrinsic value of units vested during the three months ended March 31, 2020 and 2019 was $11.5 million and $3.2 million, respectively. As of March 31, 2020, there was $62.7 million of total unrecognized compensation cost relating to RSU awards which is expected to be recognized over a weighted-average period of 2.3 years. Historically we issued stock options to our employees and non-employee directors. Beginning in 2019, we no longer issue stock options. Stock options were awarded with the exercise price equal to the market price on the date of grant and generally vest over three years and expire 10 years after grant. Compensation expense attributable to employee stock options for the first three months of 2020 was approximately $0.9 million ($0.7 million after tax). Approximately $0.7 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. Compensation expense attributable to stock options for the first three months of 2019 was approximately $1.8 million ($1.5 million after tax). Approximately $1.6 million of the compensation expense was recorded in selling, research & development and administrative expenses and the balance was recorded in cost of sales. The reduction in stock option expense is due to our move to RSUs as discussed above. For stock option grants, we used historical data to estimate expected life and volatility. A summary of option activity under our stock plans during the three months ended March 31, 2020 is presented below: Stock Awards Plans Director Stock Option Plans Weighted Average Weighted Average Options Exercise Price Options Exercise Price Outstanding, January 1, 2020 5,044,180 $ 68.32 135,251 $ 58.45 Granted — — — — Exercised (292,090) 55.16 (21,251) 51.20 Forfeited or expired (6,630) 65.60 — — Outstanding at March 31, 2020 4,745,460 $ 69.20 114,000 $ 59.80 Exercisable at March 31, 2020 4,583,864 $ 68.43 114,000 $ 59.80 Weighted-Average Remaining Contractual Term (Years): Outstanding at March 31, 2020 5.3 3.2 Exercisable at March 31, 2020 5.1 3.2 Aggregate Intrinsic Value: Outstanding at March 31, 2020 $ 143,971 $ 4,530 Exercisable at March 31, 2020 $ 142,195 $ 4,530 Intrinsic Value of Options Exercised During the Three Months Ended: March 31, 2020 $ 18,202 $ 1,385 March 31, 2019 $ 14,047 $ 51 The grant date fair value of options vested during the three months ended March 31, 2020 and 2019 was $7.6 million and $12.2 million, respectively. Cash received from option exercises was approximately |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 15 – EARNINGS PER SHARE Basic net income per share is calculated by dividing net income attributable to Aptar by the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing the net income attributable to Aptar by the weighted-average number of common and common equivalent shares outstanding during the applicable period. The difference between basic and diluted earnings per share is attributable to stock-based compensation awards. Stock-based compensation awards for which total employee proceeds exceed the average market price over the applicable period would have an antidilutive effect on earnings per share, and accordingly, are excluded from the calculation of diluted earnings per share. The reconciliation of basic and diluted earnings per share for the three months ended March 31, 2020 and 2019 is as follows: Three Months Ended March 31, 2020 March 31, 2019 Diluted Basic Diluted Basic Consolidated operations Income available to common stockholders $ 55,253 $ 55,253 $ 63,004 $ 63,004 Average equivalent shares Shares of common stock 64,009 64,009 62,964 62,964 Effect of dilutive stock-based compensation Stock options 1,810 — 2,222 — Restricted stock 292 — 163 — Total average equivalent shares 66,111 64,009 65,349 62,964 Net income per share $ 0.84 $ 0.86 $ 0.96 $ 1.00 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 16 – SEGMENT INFORMATION We are organized into three reporting segments. Our Beauty + Home segment sells to the personal care, beauty and home care markets. Our Pharma segment serves customers in the prescription drug, consumer health care, injectables and active packaging markets. Our Food + Beverage segment sells to the food and beverage markets. The accounting policies of the segments are the same as those described in Part II, Item 8, Note 1 - Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2019. We evaluate performance of our business units and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring and acquisition-related costs. All internal segment reporting and discussions of results with our Chief Operating Decision Maker (CODM) are based on segment Adjusted EBITDA. Financial information regarding our reporting segments is shown below: Three Months Ended March 31, 2020 2019 Total Sales: Beauty + Home $ 330,466 $ 373,503 Pharma 299,590 274,494 Food + Beverage 100,301 104,727 Total Sales $ 730,357 $ 752,724 Less: Intersegment Sales: Beauty + Home $ 5,906 $ 5,844 Pharma 2,394 1,793 Food + Beverage 504 627 Total Intersegment Sales $ 8,804 $ 8,264 Net Sales: Beauty + Home $ 324,560 $ 367,659 Pharma 297,196 272,701 Food + Beverage 99,797 104,100 Net Sales $ 721,553 $ 744,460 Adjusted EBITDA (1): Beauty + Home $ 34,247 $ 53,191 Pharma 108,342 97,357 Food + Beverage 15,407 16,691 Corporate & Other, unallocated (13,828) (12,755) Acquisition-related costs (2) (2,274) — Restructuring Initiatives (3) (4,839) (9,530) Depreciation and amortization (50,806) (47,489) Interest Expense (8,388) (9,214) Interest Income 175 1,748 Income before Income Taxes $ 78,036 $ 89,999 (1) We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring and acquisition-related costs. (2) Acquisition-related costs include transaction costs and purchase accounting adjustments related to acquisitions and investments (see Note 17 – Acquisitions and Note 18 – Investment in Equity Securities for further details). (3) Restructuring Initiatives includes expense items for the three months ended March 31, 2020 and 2019 as follows (see Note 19 – Restructuring Initiatives for further details): Three Months Ended March 31, 2020 2019 Restructuring Initiatives by Segment Beauty + Home $ 4,907 $ 8,269 Pharma (31) 326 Food + Beverage 103 510 Corporate & Other (140) 425 Total Restructuring Initiatives $ 4,839 $ 9,530 |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2020 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 17 – ACQUISITIONS Business Combinations On February 13, 2020, we entered into a securities purchase agreement to acquire 100% of the equity interests (the “Fusion Acquisition”) of Fusion Packaging, Inc. (“Fusion”). Subsequent to the quarter end, on April 1, 2020 we closed on the Fusion Acquisition for a purchase price of approximately $165 million. Fusion, based in Dallas, TX, is a global leader in the design, engineering and distribution of luxury packaging for the beauty industry. The purchase agreement also provides an earn-out provision providing for the payment of up to $33.9 million based on Fusion’s financial performance during a 3 year measurement period. On October 31, 2019, we completed our acquisition (the “Noble Acquisition”) of 100% of the equity interests of Noble International Holdings, Inc., Genia Medical, Inc. and JBCB Holdings, LLC (collectively referred to as “Noble”). Noble, based in Orlando, FL, is a leading provider in developing patient-centric advanced drug delivery system training devices including autoinjector, prefilled syringe, onbody and respiratory devices for the world’s leading biopharmaceutical companies and original equipment manufacturers. The purchase price was approximately $62.3 million (net of $1.6 million of cash acquired) and was funded by cash on hand. As part of the Noble Acquisition, we are also obligated to pay to the selling equityholders of Noble certain contingent consideration based on 2024 cumulative financial performance metrics defined in the purchase agreement. Based on projection as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $2.9 million utilizing the Black-Scholes valuation model. As of December 31, 2019, $5 million was held in restricted cash pending the finalization of a working capital adjustment and indemnity escrow. During the first quarter of 2020, $1.0 million related to the working capital escrow was released from restriction, resulting in an additional $463 thousand payment due to the seller and a corresponding increase to our purchase price and associated goodwill balance. The results of Noble’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition. On June 5, 2019, we completed our acquisition (the “Nanopharm Acquisition”) of all of the outstanding capital stock of Nanopharm Ltd. (“Nanopharm”). Nanopharm, located in Newport, UK, is a science-driven, leading provider of orally inhaled and nasal drug product design and development services. The purchase price was approximately $38.1 million (net of $1.8 million of cash acquired) and was funded by cash on hand. The results of Nanopharm’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition. On May 31, 2019, we completed our acquisition (the “Gateway Acquisition”) of all of the outstanding equity interests of Gateway Analytical LLC (“Gateway”). Gateway, located in Gibsonia, PA, provides industry-leading particulate detection and predictive analytical services to customers developing injectable medicines. The purchase price was approximately $7.0 million and was funded by cash on hand. As part of the Gateway Acquisition, we are also obligated to pay to the selling equityholder of Gateway certain contingent consideration based on 2020 and 2022 performance targets defined in the purchase agreement. Based on projections as of the acquisition date, we estimated the aggregate fair value for this contingent consideration arrangement to be $3.0 million. The results of Gateway’s operations have been included in the Condensed Consolidated Financial Statements within our Pharma segment since the date of acquisition. The following table summarizes the assets acquired and liabilities assumed 2019 Assets Cash and equivalents $ 3,427 Accounts receivable 3,504 Prepaid and other 2,478 Property, plant and equipment 4,267 Goodwill 59,143 Intangible assets 52,980 Other miscellaneous assets 430 Liabilities Accounts payable, accrued and other liabilities 5,388 Deferred income taxes 2,592 Deferred and other non-current liabilities 1,598 Net assets acquired $ 116,651 The following table is a summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date: 2019 Weighted-Average Estimated Useful Life Fair Value (in years) of Asset Acquired technology 8 $ 9,160 Customer relationships 11 39,379 Trademarks and trade names 4 2,457 License agreements and other 1 1,984 Total $ 52,980 Goodwill in the amount of $59.1 million was recorded related to the 2019 acquisitions which is included in the Pharma segment. Goodwill is calculated as the excess of the consideration transferred over the net assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill largely consists of leveraging our commercial presence in selling the Noble, Nanopharm and Gateway lines of products in markets where they did not previously operate and the abilities of the acquired companies to maintain their competitive advantage from a technical viewpoint. Goodwill will not be amortized, but will be tested for impairment at least annually. For 2019 acquisitions, goodwill of $29.6 million will be deductible for tax purposes. Asset Acquisition On August 2, 2019, we completed our asset acquisition (the “Bapco Acquisition”) of the remaining 80% ownership interest in the capital stock of Bapco Closures Holdings Limited (“Bapco”), for $3.8 million (net of $2.9 million of cash acquired). The 20% ownership investment previously held in Bapco is now included within the intangible assets acquired. Bapco, located in Leeds, UK, provides innovative closures sealing technology that provides package integrity and tamper evidence. The results of Bapco’s operations have been included in the Condensed Consolidated Financial Statements within our Food + Beverage segment since the date of acquisition. |
INVESTMENT IN EQUITY SECURITIES
INVESTMENT IN EQUITY SECURITIES | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method and Other Investments [Abstract] | |
INVESTMENT IN EQUITY SECURITIES | NOTE 18 –INVESTMENT IN EQUITY SECURITIES Our investment in equity securities consisted of the following: March 31, December 31, 2020 2019 Equity Method Investments: BTY $ 31,043 $ 119 Kali Care 3,772 3,881 Desotec GmbH 811 858 Other Investments 3,541 3,538 $ 39,167 $ 8,396 Equity method investments BTY On October 1, 2019 we entered into a strategic definitive agreement to acquire 49% of the equity interests in 3 related companies: Suzhou Hsing Kwang, Suqian Hsing Kwang and Suzhou BTY (collectively referred to as “BTY”), contingent on the settlement date of the transaction. We have a call option to acquire an additional 26% to 31% of BTY’s equity interests following the initial lock-up period of 5 years based on a predetermined formula. Subsequent to the second lock-up period, which ends 3 years subsequent to the initial lock-up period, we have a call option to acquire the remaining equity interests of BTY based on a predetermined formula. Additionally, the selling shareholders of BTY have a put option for the remaining equity interest to be acquired by Aptar based on a predetermined formula. The BTY entities are leading Chinese manufacturers of high quality, decorative metal components, metal-plastic sub-assemblies, and complete color cosmetics packaging solutions for the beauty industry. On January 1, 2020, the transaction closed for an approximate purchase price of $31 million for our 49% share. As of March 31, 2020, we paid approximately $20 million, with the remaining amount of $11 million included in Accounts payable, accrued and other liabilities. The amount is payable after certain conditions under the definitive agreement are fulfilled and is expected to be paid during the second quarter of 2020. Kali Care During 2017, we invested $5 million to acquire 20% of the equity interests in Kali Care, a technology company that provides digital monitoring systems for medical devices. Desotec GmbH During 2009, we invested €574 thousand to acquire 23% of the equity interests in Desotec GmbH, a leading manufacturer of special assembly machines for bulk processing for the pharmaceutical, beauty and home and food and beverages markets. Healthcare, Inc. Subsequent to the quarter end, on April 1, 2020, we invested $5 million to acquire 30% of the equity interests in Healthcare, Inc., Shanghai Sonmol Internet Technology Co., Ltd. and its subsidiary, Shanghai Sonmol Medical Equipment Co., Ltd., a pharmaceutical company that provides connected devices for asthma control. Other investments During August 2019, we invested an aggregate amount of $3.5 million in two preferred equity investments in sustainability companies Loop and Purecycle Technologies that are accounted for at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. There were no indications of impairment nor were there any changes from observable price changes noted in the three months ended March 31, 2020. |
RESTRUCTURING INITIATIVES
RESTRUCTURING INITIATIVES | 3 Months Ended |
Mar. 31, 2020 | |
RESTRUCTURING INITIATIVES. | |
RESTRUCTURING INITIATIVES | NOTE 19 – RESTRUCTURING INITIATIVES In late 2017, we began a business transformation to drive profitable sales growth, increase operational excellence, enhance our approach to innovation and improve organizational effectiveness. The primary focus of the plan is the Beauty + Home segment; however, certain global general and administrative functions are also being addressed. For the three months ended March 31, 2020 and 2019, we recognized $4.8 million and $9.5 million of restructuring costs related to this plan, respectively. Using current exchange rates, we estimate total implementation costs of approximately $110 million for these initiatives, including costs that have been recognized to date. The cumulative expense incurred as of March 31, 2020 was $91.3 million. We also anticipate making capital investments related to the transformation plan of approximately $50 million, of which $40 million has been incurred to date. As of March 31, 2020 we have recorded the following activity associated with the business transformation: Beginning Net Charges for Ending Reserve at the Three Months Interest and Reserve at 12/31/2019 Ended 3/31/2020 Cash Paid FX Impact 3/31/2020 Employee severance $ 7,090 $ 4,066 $ (503) $ 187 $ 10,840 Professional fees and other costs 3,609 773 (3,069) (9) 1,304 Totals $ 10,699 $ 4,839 $ (3,572) $ 178 $ 12,144 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS. | |
SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS On April 1, 2020, the Fusion Acquisition closed for an approximate purchase price of $165 million, plus an earn-out, to acquire 100% of the membership interests. Refer to Note 17 – Acquisitions for further details on the acquisition. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of AptarGroup, Inc. and our subsidiaries. The terms “AptarGroup”, “Aptar”, “Company”, “we”, “us” or “our” as used herein refer to AptarGroup, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the unaudited Condensed Consolidated Financial Statements (the “Condensed Consolidated Financial Statements”) include all normal recurring adjustments necessary for a fair statement of consolidated financial position, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. The accompanying Condensed Consolidated Financial Statements have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. Also, certain financial position data included herein was derived from the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 but does not include all disclosures required by U.S. GAAP. Accordingly, these Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations of any interim period are not necessarily indicative of the results that may be expected for the year. There are many uncertainties regarding the current COVID-19 pandemic, including the scope of scientific and health issues, the anticipated duration of the pandemic and the extent of local and worldwide social, political and economic disruption it may cause. The pandemic has impacted our business, operations and financial results during the quarter ended March 31, 2020 including an overall reduction to net sales. No impairments were recorded as of March 31, 2020. While the disruption is currently expected to be temporary, there is uncertainty around the duration. Due to significant uncertainty surrounding the situation, our judgment regarding future results could change and therefore our results could be materially impacted. |
INCOME TAXES | INCOME TAXES We compute taxes on income in accordance with the tax rules and regulations of the many taxing authorities where the income is earned. The income tax rates imposed by these taxing authorities may vary substantially. Taxable income may differ from pre-tax income for financial accounting purposes. To the extent that these differences create timing differences between the tax basis of an asset or liability and our reported amount in the financial statements, an appropriate provision for deferred income taxes is made. We maintain our assertion that the cash and distributable reserves at our non-U.S. affiliates are indefinitely reinvested. Under current U.S. tax laws, all of our non-U.S. earnings are subject to U.S. taxation. We will provide for the necessary withholding and local income taxes when management decides that an affiliate should make a distribution. These decisions are made taking into consideration the financial requirements of the non-U.S. affiliates and the global cash management goals of the Company. We provide a liability for the amount of unrecognized tax benefits from uncertain tax positions. This liability is provided whenever we determine that a tax benefit will not meet a more-likely-than-not threshold for recognition. The Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisdictions. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner inconsistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. The resolution of each of these audits is not expected to be material to our Condensed Consolidated Financial Statements. |
ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | ADOPTION OF RECENT ACCOUNTING STANDARDS Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification. Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, issued by the FASB in June 2016, as well as the clarifying amendments subsequently issued. We applied the guidance using a modified retrospective approach and accordingly recognized an amount of $1.4 million as the cumulative adjustment to opening retained earnings in the first quarter of 2020. This is based on management's best estimates of specific losses on individual exposures particularly on current trade receivables, as well as the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. On an ongoing basis, we will contemplate forward-looking economic conditions in recording lifetime expected credit losses for our financial assets measured at cost, such as our trade receivables and certain other assets. In January 2017, the FASB issued ASU 2017-04, which provides guidance to simplify how an entity is required to test goodwill for impairm ent by eliminating Step 2 from the goodwill impairment test. As a result, impairment charges are required for the amount by which a reporting unit’s carrying amount exceeds its fair value up to the amount of its allocated goodwill. We adopted the standard on January 1, 2020 and did not record any impairment charges. In August 2018, the FASB issued ASU 2018-15 to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. We adopted the standard on January 1, 2020 and no material impacts were noted. In August 2018, the FASB issued ASU 2018-13, which amends disclosure requirements for fair value measurements. The new standard modifies disclosure requirements including removing requirements to disclose the valuation process for Level 3 measurements and adding requirements to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. We adopted the standard on January 1, 2020 and no material impacts were noted. Other accounting standards that have been issued by the FASB or other standards-setting bodies did not have a material impact on our Condensed Consolidated Financial Statements. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
REVENUE. | |
Schedule of revenue by segment by geographic area | For the Three Months Ended March 31, 2020 Latin Segment Europe Domestic America Asia Total Beauty + Home $ 186,950 $ 81,845 $ 36,181 $ 19,584 $ 324,560 Pharma 190,130 90,965 6,579 9,522 297,196 Food + Beverage 28,769 57,590 8,034 5,404 99,797 Total $ 405,849 $ 230,400 $ 50,794 $ 34,510 $ 721,553 For the Three Months Ended March 31, 2019 Latin Segment Europe Domestic America Asia Total Beauty + Home $ 216,233 $ 86,979 $ 42,642 $ 21,805 $ 367,659 Pharma 184,174 71,772 7,656 9,099 272,701 Food + Beverage 30,961 55,120 7,884 10,135 104,100 Total $ 431,368 $ 213,871 $ 58,182 $ 41,039 $ 744,460 |
Schedule of opening and closing balances of contract assets and contract liabilities | Balance as of Balance as of Increase/ December 31, 2019 March 31, 2020 (Decrease) Contract asset (current) $ 16,245 $ 13,457 $ (2,788) Contract asset (long-term) $ — $ — $ — Contract liability (current) $ 79,305 $ 78,974 $ (331) Contract liability (long-term) $ 9,779 $ 14,994 $ 5,215 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
INVENTORIES | |
Schedule of inventories, by component | March 31, December 31, 2020 2019 Raw materials $ 106,787 $ 111,653 Work in process 120,151 123,750 Finished goods 144,921 140,392 Total $ 371,859 $ 375,795 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of changes in the carrying amount of goodwill | Beauty + Food + Corporate Home Pharma Beverage & Other Total Goodwill $ 221,658 $ 413,650 $ 128,153 $ 1,615 $ 765,076 Accumulated impairment losses — — — (1,615) (1,615) Balance as of December 31, 2019 $ 221,658 $ 413,650 $ 128,153 $ — $ 763,461 Acquisition — 463 — — 463 Foreign currency exchange effects (2,201) (5,543) (99) — (7,843) Goodwill $ 219,457 $ 408,570 $ 128,054 $ 1,615 $ 757,696 Accumulated impairment losses — — — (1,615) (1,615) Balance as of March 31, 2020 $ 219,457 $ 408,570 $ 128,054 $ — $ 756,081 |
Summary of amortized intangible assets | March 31, 2020 December 31, 2019 Weighted Average Gross Gross Amortization Period Carrying Accumulated Net Carrying Accumulated Net (Years) Amount Amortization Value Amount Amortization Value Amortized intangible assets: Patents 7.9 $ 3,001 (1,304) $ 1,697 $ 2,804 $ (1,318) $ 1,486 Acquired technology 13.0 99,437 (27,143) 72,294 100,511 (25,430) 75,081 Customer relationships 13.7 216,198 (37,774) 178,424 217,934 (33,924) 184,010 Trademarks and trade names 6.9 34,131 (11,919) 22,212 35,015 (11,003) 24,012 License agreements and other 17.6 19,671 (10,177) 9,494 16,153 (9,658) 6,495 Total intangible assets 13.0 $ 372,438 $ (88,317) $ 284,121 $ 372,417 $ (81,333) $ 291,084 |
Schedule of future estimated amortization expense | Future estimated amortization expense for the years ending December 31 is as follows: 2020 $ 20,725 (remaining estimated amortization for 2020) 2021 27,154 2022 26,915 2023 26,835 2024 and thereafter 182,492 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
DEBT | |
Schedule of short-term debt | March 31, December 31, 2020 2019 Notes payable 8.10% due in 2020 $ 2,664 $ 1,436 Revolving credit facility 1.88% due in 2020 200,000 25,000 Overdrafts 5.68% - 7.82% due in 2020 17,847 17,823 $ 220,511 $ 44,259 |
Schedule of long-term obligations | At March 31, 2020, our long-term obligations consisted of the following: Unamortized Debt Issuance Principal Costs Net Notes payable 0.00% – 10.90%, due in monthly and annual installments through 2028 $ 15,551 $ — $ 15,551 Senior unsecured notes 3.2%, due in 2022 75,000 59 74,941 Senior unsecured debts 3.1% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022 168,000 352 167,648 Senior unsecured notes 3.5%, due in 2023 125,000 135 124,865 Senior unsecured notes 1.0%, due in 2023 110,315 341 109,974 Senior unsecured notes 3.4%, due in 2024 50,000 60 49,940 Senior unsecured notes 3.5%, due in 2024 100,000 135 99,865 Senior unsecured notes 1.2%, due in 2024 220,630 701 219,929 Senior unsecured notes 3.6%, due in 2025 125,000 157 124,843 Senior unsecured notes 3.6%, due in 2026 125,000 157 124,843 Finance Lease Liabilities 28,395 — 28,395 $ 1,142,891 $ 2,097 $ 1,140,794 Current maturities of long-term obligations (65,049) — (65,049) Total long-term obligations $ 1,077,842 $ 2,097 $ 1,075,745 At December 31, 2019, our long-term obligations consisted of the following: Unamortized Debt Issuance Principal Costs Net Notes payable 0.00% – 10.90%, due in monthly and annual installments through 2028 $ 19,220 $ — $ 19,220 Senior unsecured notes 3.2%, due in 2022 75,000 64 74,936 Senior unsecured debts 3.2% USD floating swapped to 1.36% EUR fixed, equal annual installments through 2022 168,000 390 167,610 Senior unsecured notes 3.5%, due in 2023 125,000 144 124,856 Senior unsecured notes 1.0%, due in 2023 112,170 356 111,814 Senior unsecured notes 3.4%, due in 2024 50,000 63 49,937 Senior unsecured notes 3.5%, due in 2024 100,000 144 99,856 Senior unsecured notes 1.2%, due in 2024 224,340 742 223,598 Senior unsecured notes 3.6%, due in 2025 125,000 169 124,831 Senior unsecured notes 3.6%, due in 2026 125,000 169 124,831 Finance Lease Liabilities 29,952 — 29,952 $ 1,153,682 $ 2,241 $ 1,151,441 Current maturities of long-term obligations (65,988) — (65,988) Total long-term obligations $ 1,087,694 $ 2,241 $ 1,085,453 |
Schedule of covenants on revolving credit facility and corporate long-term obligations | Requirement Level at March 31, 2020 Consolidated Leverage Ratio (1) Maximum 1.73 to 1.00 Consolidated Interest Coverage Ratio (1) Minimum of 3.00 to 1.00 16.32 to 1.00 (1) Definitions of ratios are included as part of the revolving credit facility agreement and the note purchase agreements. |
LEASE COMMITMENTS (Tables)
LEASE COMMITMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LEASE COMMITMENTS | |
Schedule of components of lease expense | Three Months Ended March 31, 2020 2019 Operating lease cost $ 5,254 $ 6,004 Finance lease cost: Amortization of right-of-use assets $ 1,199 $ 872 Interest on lease liabilities 348 315 Total finance lease cost $ 1,547 $ 1,187 Short-term lease and variable lease costs $ 2,448 $ 1,942 |
Schedule of supplemental cash flow information related to leases | Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,328 $ 6,469 Operating cash flows from finance leases 369 243 Financing cash flows from finance leases 1,657 1,140 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,233 $ 4,515 Finance leases 220 10,697 |
RETIREMENT AND DEFERRED COMPE_2
RETIREMENT AND DEFERRED COMPENSATION PLANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
RETIREMENT AND DEFERRED COMPENSATION PLANS | |
Components of net periodic benefit cost | Domestic Plans Foreign Plans Three Months Ended March 31, 2020 2019 2020 2019 Service cost $ 3,577 $ 2,773 $ 1,768 $ 1,460 Interest cost 1,987 1,845 340 501 Expected return on plan assets (3,422) (3,094) (634) (592) Amortization of net loss 1,548 489 514 363 Amortization of prior service cost — — 97 113 Net periodic benefit cost $ 3,690 $ 2,013 $ 2,085 $ 1,845 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
Changes in Accumulated Other Comprehensive Income/(Loss) by Component | Foreign Defined Benefit Currency Pension Plans Derivatives Total Balance - December 31, 2018 $ (248,401) $ (60,463) $ (1,640) $ (310,504) Other comprehensive (loss) income before reclassifications (9,619) — 5,738 (3,881) Amounts reclassified from accumulated other comprehensive income (loss) — 721 (6,131) (5,410) Net current-period other comprehensive (loss) income (9,619) 721 (393) (9,291) Balance - March 31, 2019 $ (258,020) $ (59,742) $ (2,033) $ (319,795) Balance - December 31, 2019 $ (257,124) $ (83,147) $ (1,677) $ (341,948) Other comprehensive (loss) income before reclassifications (42,229) — 5,026 (37,203) Amounts reclassified from accumulated other comprehensive income (loss) — 1,636 (3,543) (1,907) Net current-period other comprehensive (loss) income (42,229) 1,636 1,483 (39,110) Balance - March 31, 2020 $ (299,353) $ (81,511) $ (194) $ (381,058) |
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income | Reclassifications Out of Accumulated Other Comprehensive (Loss) Income: Amount Reclassified from Details about Accumulated Other Accumulated Other Affected Line in the Statement Comprehensive Income Components Comprehensive Income Where Net Income is Presented Three Months Ended March 31, 2020 2019 Defined Benefit Pension Plans Amortization of net loss $ 2,062 $ 852 (1) Amortization of prior service cost 97 113 (1) 2,159 965 Total before tax (523) (244) Tax benefit $ 1,636 $ 721 Net of tax Derivatives Changes in cross currency swap: interest component $ (763) $ (1,454) Interest Expense Changes in cross currency swap: foreign exchange component (2,780) (4,677) Miscellaneous, net $ (3,543) $ (6,131) Net of tax Total reclassifications for the period $ (1,907) $ (5,410) (1) These accumulated other comprehensive income components are included in the computation of net periodic benefit costs, net of tax. See Note 8 – Retirement and Deferred Compensation Plans for additional details. |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Schedule of Fair Value of Derivative Instruments in the Consolidated Balance Sheets | Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 March 31, 2020 December 31, 2019 Derivatives Derivatives Derivatives not Derivatives not Designated Designated Designated Designated Balance Sheet as Hedging as Hedging as Hedging as Hedging Location Instruments Instruments Instruments Instruments Derivative Assets Foreign Exchange Contracts Prepaid and other $ — $ 2,061 $ — $ 206 Cross Currency Swap Contract (1) Prepaid and other 6,769 — 2,552 — $ 6,769 $ 2,061 $ 2,552 $ 206 Derivative Liabilities Foreign Exchange Contracts Accounts payable, accrued and other liabilities $ — $ 505 $ — $ 401 $ — $ 505 $ — $ 401 (1) This cross currency swap contract is composed of both an interest component and a foreign exchange component. |
Schedule of Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) | The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) for the Three Months Ended March 31, 2020 and 2019 Amount of Gain (Loss) Total Amount Amount of Gain (Loss) Location of (Loss) Reclassified from of Affected Derivatives in Cash Recognized in Gain Recognized Accumulated Income Flow Hedging Other Comprehensive in Income on Other Comprehensive Statement Relationships Income on Derivative Derivatives Income on Derivative Line Item 2020 2019 2020 2019 Cross currency swap contract: Interest component $ 2,246 $ 1,392 Interest expense $ 763 $ 1,454 $ (8,388) Foreign exchange component 2,780 4,677 Miscellaneous, net 2,780 4,677 (1,412) $ 5,026 $ 6,069 $ 3,543 $ 6,131 |
Schedule of Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income | The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2020 and 2019 Amount of (Loss) Gain Derivatives Not Designated Location of (Loss) Gain Recognized Recognized in Income as Hedging Instruments in Income on Derivatives on Derivatives 2020 2019 Foreign Exchange Contracts Other (Expense) Income: $ 1,747 $ (263) $ 1,747 $ (263) |
Schedule of offsetting derivative assets and liabilities | Gross Amounts not Offset Gross Amounts Net Amounts in the Statement of Offset in the Presented in Financial Position Gross Statement of the Statement of Financial Cash Collateral Net Amount Financial Position Financial Position Instruments Received Amount Description March 31, 2020 Derivative Assets $ 8,830 — $ 8,830 — — $ 8,830 Total Assets $ 8,830 — $ 8,830 — — $ 8,830 Derivative Liabilities $ 505 — $ 505 — — $ 505 Total Liabilities $ 505 — $ 505 — — $ 505 December 31, 2019 Derivative Assets $ 2,758 — $ 2,758 — — $ 2,758 Total Assets $ 2,758 — $ 2,758 — — $ 2,758 Derivative Liabilities $ 401 — $ 401 — — $ 401 Total Liabilities $ 401 — $ 401 — — $ 401 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE | |
Schedule of fair values of financial assets and liabilities | As of March 31, 2020, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (1) $ 2,061 $ — $ 2,061 $ — Cross currency swap contract (1) 6,769 — 6,769 — Total assets at fair value $ 8,830 $ — $ 8,830 $ — Liabilities Foreign exchange contracts (1) $ 505 $ — $ 505 $ — Contingent consideration obligation 5,930 — — 5,930 Total liabilities at fair value $ 6,435 $ — $ 505 $ 5,930 As of December 31, 2019, the fair values of our financial assets and liabilities were categorized as follows: Total Level 1 Level 2 Level 3 Assets Foreign exchange contracts (1) $ 206 $ — $ 206 $ — Cross currency swap contract (1) 2,552 — 2,552 — Total assets at fair value $ 2,758 $ — $ 2,758 $ — Liabilities Foreign exchange contracts (1) $ 401 $ — $ 401 $ — Contingent consideration obligation 5,930 — — 5,930 Total liabilities at fair value $ 6,331 $ — $ 401 $ 5,930 (1) Market approach valuation technique based on observable market transactions of spot and forward rates. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION | |
Summary of option activity | Stock Awards Plans Director Stock Option Plans Weighted Average Weighted Average Options Exercise Price Options Exercise Price Outstanding, January 1, 2020 5,044,180 $ 68.32 135,251 $ 58.45 Granted — — — — Exercised (292,090) 55.16 (21,251) 51.20 Forfeited or expired (6,630) 65.60 — — Outstanding at March 31, 2020 4,745,460 $ 69.20 114,000 $ 59.80 Exercisable at March 31, 2020 4,583,864 $ 68.43 114,000 $ 59.80 Weighted-Average Remaining Contractual Term (Years): Outstanding at March 31, 2020 5.3 3.2 Exercisable at March 31, 2020 5.1 3.2 Aggregate Intrinsic Value: Outstanding at March 31, 2020 $ 143,971 $ 4,530 Exercisable at March 31, 2020 $ 142,195 $ 4,530 Intrinsic Value of Options Exercised During the Three Months Ended: March 31, 2020 $ 18,202 $ 1,385 March 31, 2019 $ 14,047 $ 51 |
Weighted-average assumptions used to estimate fair value of restricted stock units | Three Months Ended March 31, 2020 2019 Fair value per stock award $ 94.98 $ 134.97 Grant date stock price $ 83.93 $ 104.51 Assumptions: Aptar's stock price expected volatility 23.80 % 16.50 % Expected average volatility of peer companies 48.50 % 31.90 % Correlation assumption 63.50 % 37.40 % Risk-free interest rate 0.31 % 2.19 % Dividend yield assumption 1.72 % 1.30 % |
Summary of restricted stock unit activity | Time-Based RSUs Performance-Based RSUs Weighted Average Weighted Average Units Grant-Date Fair Value Units Grant-Date Fair Value Nonvested at January 1, 2020 480,729 $ 95.45 181,680 $ 117.26 Granted 176,424 81.75 206,408 90.85 Vested (112,515) 82.64 — — Forfeited (217) 100.14 (589) 120.61 Nonvested at March 31, 2020 544,421 $ 92.11 387,499 $ 103.23 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER SHARE | |
Reconciliation of Basic and Diluted Earnings Per Share | Three Months Ended March 31, 2020 March 31, 2019 Diluted Basic Diluted Basic Consolidated operations Income available to common stockholders $ 55,253 $ 55,253 $ 63,004 $ 63,004 Average equivalent shares Shares of common stock 64,009 64,009 62,964 62,964 Effect of dilutive stock-based compensation Stock options 1,810 — 2,222 — Restricted stock 292 — 163 — Total average equivalent shares 66,111 64,009 65,349 62,964 Net income per share $ 0.84 $ 0.86 $ 0.96 $ 1.00 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SEGMENT INFORMATION | |
Financial information regarding the Company's reportable segments | Financial information regarding our reporting segments is shown below: Three Months Ended March 31, 2020 2019 Total Sales: Beauty + Home $ 330,466 $ 373,503 Pharma 299,590 274,494 Food + Beverage 100,301 104,727 Total Sales $ 730,357 $ 752,724 Less: Intersegment Sales: Beauty + Home $ 5,906 $ 5,844 Pharma 2,394 1,793 Food + Beverage 504 627 Total Intersegment Sales $ 8,804 $ 8,264 Net Sales: Beauty + Home $ 324,560 $ 367,659 Pharma 297,196 272,701 Food + Beverage 99,797 104,100 Net Sales $ 721,553 $ 744,460 Adjusted EBITDA (1): Beauty + Home $ 34,247 $ 53,191 Pharma 108,342 97,357 Food + Beverage 15,407 16,691 Corporate & Other, unallocated (13,828) (12,755) Acquisition-related costs (2) (2,274) — Restructuring Initiatives (3) (4,839) (9,530) Depreciation and amortization (50,806) (47,489) Interest Expense (8,388) (9,214) Interest Income 175 1,748 Income before Income Taxes $ 78,036 $ 89,999 (1) We evaluate performance of our reporting segments and allocate resources based upon Adjusted EBITDA. Adjusted EBITDA is defined as earnings before net interest, taxes, depreciation, amortization, unallocated corporate expenses, restructuring and acquisition-related costs. (2) Acquisition-related costs include transaction costs and purchase accounting adjustments related to acquisitions and investments (see Note 17 – Acquisitions and Note 18 – Investment in Equity Securities for further details). (3) Restructuring Initiatives includes expense items for the three months ended March 31, 2020 and 2019 as follows (see Note 19 – Restructuring Initiatives for further details): Three Months Ended March 31, 2020 2019 Restructuring Initiatives by Segment Beauty + Home $ 4,907 $ 8,269 Pharma (31) 326 Food + Beverage 103 510 Corporate & Other (140) 425 Total Restructuring Initiatives $ 4,839 $ 9,530 |
Restructuring Initiatives | Three Months Ended March 31, 2020 2019 Restructuring Initiatives by Segment Beauty + Home $ 4,907 $ 8,269 Pharma (31) 326 Food + Beverage 103 510 Corporate & Other (140) 425 Total Restructuring Initiatives $ 4,839 $ 9,530 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ACQUISITIONS | |
Summary of assets acquired and liabilities assumed at estimated fair value | 2019 Assets Cash and equivalents $ 3,427 Accounts receivable 3,504 Prepaid and other 2,478 Property, plant and equipment 4,267 Goodwill 59,143 Intangible assets 52,980 Other miscellaneous assets 430 Liabilities Accounts payable, accrued and other liabilities 5,388 Deferred income taxes 2,592 Deferred and other non-current liabilities 1,598 Net assets acquired $ 116,651 |
Summary of the fair value estimates of the acquired identifiable intangible assets and weighted-average useful lives as of the acquisition date | 2019 Weighted-Average Estimated Useful Life Fair Value (in years) of Asset Acquired technology 8 $ 9,160 Customer relationships 11 39,379 Trademarks and trade names 4 2,457 License agreements and other 1 1,984 Total $ 52,980 |
INVESTMENT IN EQUITY SECURITI_2
INVESTMENT IN EQUITY SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method and Other Investments [Abstract] | |
Schedule of investments in equity securities | March 31, December 31, 2020 2019 Equity Method Investments: BTY $ 31,043 $ 119 Kali Care 3,772 3,881 Desotec GmbH 811 858 Other Investments 3,541 3,538 $ 39,167 $ 8,396 |
RESTRUCTURING INITIATIVES (Tabl
RESTRUCTURING INITIATIVES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
RESTRUCTURING INITIATIVES. | |
Activity associated with the entity's restructuring initiatives | Beginning Net Charges for Ending Reserve at the Three Months Interest and Reserve at 12/31/2019 Ended 3/31/2020 Cash Paid FX Impact 3/31/2020 Employee severance $ 7,090 $ 4,066 $ (503) $ 187 $ 10,840 Professional fees and other costs 3,609 773 (3,069) (9) 1,304 Totals $ 10,699 $ 4,839 $ (3,572) $ 178 $ 12,144 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020USD ($)segment$ / shares | Mar. 31, 2019USD ($)shares | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($)$ / shares | |
Number of reportable segments | segment | 3 | |||
Total Restructuring Initiatives | $ 4,839 | $ 9,530 | ||
INVESTMENTS IN EQUITY SECURITIES | ||||
Proceeds from sale of investment in equity securities | $ 16,487 | |||
Investment in unconsolidated affiliate | 20,423 | |||
GOODWILL | ||||
Impairment of goodwill | $ 0 | |||
RETIREMENT OF COMMON STOCK | ||||
Common stock repurchased (retired and held in treasury) (in shares) | shares | 159 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||
ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Retained earnings | $ 1,554,665 | $ 1,523,820 | ||
Adjustment | Accounting Standards Update 2016-13 | ||||
ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | ||||
Retained earnings | $ (1,400) | |||
Beauty + Home | ||||
Total Restructuring Initiatives | 4,907 | $ 8,269 | ||
Pharma | ||||
Total Restructuring Initiatives | (31) | 326 | ||
Food + Beverage | ||||
Total Restructuring Initiatives | 103 | 510 | ||
Corporate & Other | ||||
Total Restructuring Initiatives | (140) | 425 | ||
Business Transformation | ||||
Total Restructuring Initiatives | $ 4,800 | $ 9,500 |
REVENUE - Revenue by Geographic
REVENUE - Revenue by Geographic Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
REVENUE | ||
Net revenue | $ 721,553 | $ 744,460 |
Beauty + Home | ||
REVENUE | ||
Net revenue | 324,560 | 367,659 |
Pharma | ||
REVENUE | ||
Net revenue | 297,196 | 272,701 |
Food + Beverage | ||
REVENUE | ||
Net revenue | 99,797 | 104,100 |
Europe | ||
REVENUE | ||
Net revenue | 405,849 | 431,368 |
Europe | Beauty + Home | ||
REVENUE | ||
Net revenue | 186,950 | 216,233 |
Europe | Pharma | ||
REVENUE | ||
Net revenue | 190,130 | 184,174 |
Europe | Food + Beverage | ||
REVENUE | ||
Net revenue | 28,769 | 30,961 |
North America | ||
REVENUE | ||
Net revenue | 230,400 | 213,871 |
North America | Beauty + Home | ||
REVENUE | ||
Net revenue | 81,845 | 86,979 |
North America | Pharma | ||
REVENUE | ||
Net revenue | 90,965 | 71,772 |
North America | Food + Beverage | ||
REVENUE | ||
Net revenue | 57,590 | 55,120 |
Latin America | ||
REVENUE | ||
Net revenue | 50,794 | 58,182 |
Latin America | Beauty + Home | ||
REVENUE | ||
Net revenue | 36,181 | 42,642 |
Latin America | Pharma | ||
REVENUE | ||
Net revenue | 6,579 | 7,656 |
Latin America | Food + Beverage | ||
REVENUE | ||
Net revenue | 8,034 | 7,884 |
Asia | ||
REVENUE | ||
Net revenue | 34,510 | 41,039 |
Asia | Beauty + Home | ||
REVENUE | ||
Net revenue | 19,584 | 21,805 |
Asia | Pharma | ||
REVENUE | ||
Net revenue | 9,522 | 9,099 |
Asia | Food + Beverage | ||
REVENUE | ||
Net revenue | $ 5,404 | $ 10,135 |
REVENUE - Contract Assets and C
REVENUE - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
REVENUE. | ||
Contract asset (current) | $ 13,457 | $ 16,245 |
Increase / (decrease) in contract asset (current) | (2,788) | |
Contract liability (current) | 78,974 | 79,305 |
Increase / (decrease) in contract liability (current) | (331) | |
Contract liability (long-term) | 14,994 | 9,779 |
Increase / (decrease) in contract liability (long-term) | 5,215 | |
Revenue recognized previously included in current contract liabilities | 12,500 | |
Revenue recognized previously included in current contract liabilities at beginning of the year | 10,600 | |
Unearned revenue associated with outstanding contracts | 432 | 515 |
Estimated revenue to be recognized in 2020 | 172 | |
Estimated revenue to be recognized in 2021 | 123 | |
Estimated revenue to be recognized after 2021 | 137 | |
Allowance for Credit Loss [Abstract] | ||
Accounts and note receivable | 602,027 | 558,428 |
Accounts and notes receivable, allowance for doubtful accounts (in dollars) | $ 5,657 | $ 3,626 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories, by component | ||
Raw materials | $ 106,787 | $ 111,653 |
Work in process | 120,151 | 123,750 |
Finished goods | 144,921 | 140,392 |
Total | $ 371,859 | $ 375,795 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Changes in the carrying amount of goodwill | ||
Goodwill | $ 757,696 | $ 765,076 |
Accumulated impairment losses | (1,615) | (1,615) |
Goodwill, Total | 756,081 | 763,461 |
Acquisition | 463 | |
Foreign currency exchange effects | (7,843) | |
Impairment of goodwill | 0 | |
Operating segment | Beauty + Home | ||
Changes in the carrying amount of goodwill | ||
Goodwill | 219,457 | 221,658 |
Goodwill, Total | 219,457 | 221,658 |
Foreign currency exchange effects | (2,201) | |
Operating segment | Pharma | ||
Changes in the carrying amount of goodwill | ||
Goodwill | 408,570 | 413,650 |
Goodwill, Total | 408,570 | 413,650 |
Acquisition | 463 | |
Foreign currency exchange effects | (5,543) | |
Operating segment | Food + Beverage | ||
Changes in the carrying amount of goodwill | ||
Goodwill | 128,054 | 128,153 |
Goodwill, Total | 128,054 | 128,153 |
Foreign currency exchange effects | (99) | |
Corporate Non-Segment | ||
Changes in the carrying amount of goodwill | ||
Goodwill | 1,615 | 1,615 |
Accumulated impairment losses | $ (1,615) | $ (1,615) |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Amortized intangible assets: | |||
Gross Carrying Amount | $ 372,438 | $ 372,417 | |
Accumulated Amortization | (88,317) | (81,333) | |
Net Value | 284,121 | 291,084 | |
Aggregate amortization expense | 8,014 | $ 6,002 | |
Future estimated amortization expense | |||
2020 | 20,725 | ||
2021 | 27,154 | ||
2022 | 26,915 | ||
2023 | 26,835 | ||
2024 and thereafter | $ 182,492 | ||
Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 13 years | ||
Patents | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 3,001 | 2,804 | |
Accumulated Amortization | (1,304) | (1,318) | |
Net Value | $ 1,697 | 1,486 | |
Patents | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 7 years 10 months 24 days | ||
Acquired technology | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 99,437 | 100,511 | |
Accumulated Amortization | (27,143) | (25,430) | |
Net Value | $ 72,294 | 75,081 | |
Acquired technology | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 13 years | ||
Customer relationships | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 216,198 | 217,934 | |
Accumulated Amortization | (37,774) | (33,924) | |
Net Value | $ 178,424 | 184,010 | |
Customer relationships | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 13 years 8 months 12 days | ||
Trademarks and trade names | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 34,131 | 35,015 | |
Accumulated Amortization | (11,919) | (11,003) | |
Net Value | $ 22,212 | 24,012 | |
Trademarks and trade names | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 6 years 10 months 24 days | ||
License agreements and other | |||
Amortized intangible assets: | |||
Gross Carrying Amount | $ 19,671 | 16,153 | |
Accumulated Amortization | (10,177) | (9,658) | |
Net Value | $ 9,494 | $ 6,495 | |
License agreements and other | Weighted Average | |||
Amortized intangible assets: | |||
Amortization Period | 17 years 7 months 6 days |
INCOME TAXES QTR (Details)
INCOME TAXES QTR (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME TAXES | ||
Effective income tax rate (as a percent) | 29.20% | 30.00% |
DEBT - Short-term Debt Obligati
DEBT - Short-term Debt Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Short-term Debt [Line Items] | ||
Notes payable, revolving credit facility and overdrafts | $ 220,511 | $ 44,259 |
Notes payable | ||
Short-term Debt [Line Items] | ||
Interest rate (as a percent) | 8.10% | |
Notes payable, revolving credit facility and overdrafts | $ 2,664 | 1,436 |
Revolving credit facility | ||
Short-term Debt [Line Items] | ||
Interest rate (as a percent) | 1.88% | |
Notes payable, revolving credit facility and overdrafts | $ 200,000 | 25,000 |
Overdrafts | ||
Short-term Debt [Line Items] | ||
Notes payable, revolving credit facility and overdrafts | $ 17,847 | $ 17,823 |
Overdrafts | Minimum | ||
Short-term Debt [Line Items] | ||
Interest rate (as a percent) | 5.68% | |
Overdrafts | Maximum | ||
Short-term Debt [Line Items] | ||
Interest rate (as a percent) | 7.82% |
DEBT (Details)
DEBT (Details) $ in Thousands, € in Millions | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2020EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | |
Components of the company's debt obligations | |||||
Consolidated Leverage Ratio | 1.73 | 1.73 | |||
Consolidated Interest Coverage Ratio | 16.32 | 16.32 | |||
Long-term obligations gross including current maturities | $ 1,142,891 | $ 1,153,682 | |||
Current maturities of long-term obligations | (65,049) | (65,988) | |||
Total long-term obligations | 1,077,842 | 1,087,694 | |||
Deferred Finance Costs, Net, Total | 2,097 | 2,241 | |||
Deferred debt issuance costs noncurrent | 2,097 | 2,241 | |||
Long-term obligations including current maturities | 1,140,794 | 1,151,441 | |||
Current maturities of long-term obligations | (65,049) | (65,988) | |||
Long-term obligations, net of unamortized debt issuance costs | 1,075,745 | 1,085,453 | |||
Aggregate long-term maturities, excluding finance lease obligations | |||||
Year One | 61,181 | ||||
Year Two | 60,285 | ||||
Year Three | 134,343 | ||||
Year Four | 337,444 | ||||
Year Five | 270,846 | ||||
After Year Five | $ 250,397 | ||||
Minimum | |||||
Components of the company's debt obligations | |||||
Consolidated Interest Coverage Ratio | 3 | 3 | |||
Maximum | |||||
Components of the company's debt obligations | |||||
Consolidated Leverage Ratio | 3.50 | 3.50 | |||
5-year revolving credit facility maturing in July 2022 | |||||
Components of the company's debt obligations | |||||
Revolving credit facility maximum borrowing capacity | $ 300,000 | € 150 | |||
Compensating balance requirement | 0 | ||||
Amount outstanding under line of credit | 200,000 | € 0 | 25,000 | € 0 | |
Notes payable | |||||
Components of the company's debt obligations | |||||
Proceeds from debt | $ 280,000 | ||||
Long-term obligations gross including current maturities | 168,000 | 168,000 | |||
Deferred Finance Costs, Net, Total | 352 | 390 | |||
Long-term obligations including current maturities | $ 167,648 | $ 167,610 | |||
Interest rate on notes (as a percent) | 1.36% | 1.36% | 1.36% | 1.36% | 1.36% |
Floating interest rate prior to conversion to a fixed interest rate | 3.10% | 3.10% | 3.20% | 3.20% | |
Notes payable 0.00% - 10.90%, due in monthly and annual installments through 2028 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 15,551 | $ 19,220 | |||
Long-term obligations including current maturities | $ 15,551 | $ 19,220 | |||
Notes payable 0.00% - 10.90%, due in monthly and annual installments through 2028 | Minimum | |||||
Components of the company's debt obligations | |||||
Interest rate on notes (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | |
Notes payable 0.00% - 10.90%, due in monthly and annual installments through 2028 | Maximum | |||||
Components of the company's debt obligations | |||||
Interest rate on notes (as a percent) | 10.90% | 10.90% | 10.90% | 10.90% | |
Senior unsecured notes 3.2%, due in 2022 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 75,000 | $ 75,000 | |||
Deferred Finance Costs, Net, Total | 59 | 64 | |||
Long-term obligations including current maturities | $ 74,941 | $ 74,936 | |||
Interest rate on notes (as a percent) | 3.20% | 3.20% | 3.20% | 3.20% | |
Senior unsecured notes 3.5%, due in 2023 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 125,000 | $ 125,000 | |||
Deferred Finance Costs, Net, Total | 135 | 144 | |||
Long-term obligations including current maturities | $ 124,865 | $ 124,856 | |||
Interest rate on notes (as a percent) | 3.50% | 3.50% | 3.50% | 3.50% | |
Senior unsecured notes 0.98%, due in 2023 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 110,315 | $ 112,170 | |||
Deferred Finance Costs, Net, Total | 341 | 356 | |||
Long-term obligations including current maturities | $ 109,974 | $ 111,814 | |||
Interest rate on notes (as a percent) | 1.00% | 1.00% | 1.00% | 1.00% | |
Senior unsecured notes 3.4%, due in 2024 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 50,000 | $ 50,000 | |||
Deferred Finance Costs, Net, Total | 60 | 63 | |||
Long-term obligations including current maturities | $ 49,940 | $ 49,937 | |||
Interest rate on notes (as a percent) | 3.40% | 3.40% | 3.40% | 3.40% | |
Senior unsecured notes 3.5%, due in 2024 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 100,000 | $ 100,000 | |||
Deferred Finance Costs, Net, Total | 135 | 144 | |||
Long-term obligations including current maturities | $ 99,865 | $ 99,856 | |||
Interest rate on notes (as a percent) | 3.50% | 3.50% | 3.50% | 3.50% | |
Senior unsecured notes 1.17%, due in 2024 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 220,630 | $ 224,340 | |||
Deferred Finance Costs, Net, Total | 701 | 742 | |||
Long-term obligations including current maturities | $ 219,929 | $ 223,598 | |||
Interest rate on notes (as a percent) | 1.20% | 1.20% | 1.20% | 1.20% | |
Senior unsecured notes 3.6%, due in 2025 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 125,000 | $ 125,000 | |||
Deferred Finance Costs, Net, Total | 157 | 169 | |||
Long-term obligations including current maturities | $ 124,843 | $ 124,831 | |||
Interest rate on notes (as a percent) | 3.60% | 3.60% | 3.60% | 3.60% | |
Senior unsecured notes 3.6%, due in 2026 | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 125,000 | $ 125,000 | |||
Deferred Finance Costs, Net, Total | 157 | 169 | |||
Long-term obligations including current maturities | $ 124,843 | $ 124,831 | |||
Interest rate on notes (as a percent) | 3.60% | 3.60% | 3.60% | 3.60% | |
Financial lease liabilities | |||||
Components of the company's debt obligations | |||||
Long-term obligations gross including current maturities | $ 28,395 | $ 29,952 | |||
Long-term obligations including current maturities | $ 28,395 | $ 29,952 |
LEASE COMMITMENTS - Components
LEASE COMMITMENTS - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Components of lease expense: | ||
Operating lease cost | $ 5,254 | $ 6,004 |
Finance lease cost: | ||
Amortization of right-of-use assets | 1,199 | 872 |
Interest on lease liabilities | 348 | 315 |
Total finance lease cost | 1,547 | 1,187 |
Short-term lease and variable lease costs | $ 2,448 | $ 1,942 |
LEASE COMMITMENTS - Supplementa
LEASE COMMITMENTS - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 5,328 | $ 6,469 |
Operating cash flows from finance leases | 369 | 243 |
Financing cash flows from finance leases | 1,657 | 1,140 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 5,233 | 4,515 |
Finance leases | $ 220 | $ 10,697 |
RETIREMENT AND DEFERRED COMPE_3
RETIREMENT AND DEFERRED COMPENSATION PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
United States | ||
Change in benefit obligation: | ||
Service cost | $ 3,577 | $ 2,773 |
Interest cost | 1,987 | 1,845 |
Change in plan assets: | ||
Employer contribution | 204 | |
Components of net periodic benefit cost: | ||
Service cost | 3,577 | 2,773 |
Interest cost | 1,987 | 1,845 |
Expected return on plan assets | (3,422) | (3,094) |
Amortization of net loss | 1,548 | 489 |
Net periodic benefit cost | 3,690 | 2,013 |
Minimum funding requirements | 0 | |
Expected contribution in current fiscal year | 200 | |
Foreign Plans | ||
Change in benefit obligation: | ||
Service cost | 1,768 | 1,460 |
Interest cost | 340 | 501 |
Change in plan assets: | ||
Employer contribution | 711 | |
Components of net periodic benefit cost: | ||
Service cost | 1,768 | 1,460 |
Interest cost | 340 | 501 |
Expected return on plan assets | (634) | (592) |
Amortization of net loss | 514 | 363 |
Amortization of prior service cost | 97 | 113 |
Net periodic benefit cost | $ 2,085 | $ 1,845 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | $ 1,571,916 | |
Balance at the end of the period | 1,587,290 | |
Foreign Currency | ||
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | (257,124) | $ (248,401) |
Other comprehensive income (loss) before reclassifications | (42,229) | (9,619) |
Net current-period other comprehensive income (loss) | (42,229) | (9,619) |
Balance at the end of the period | (299,353) | (258,020) |
Defined Benefit Pension Plans | ||
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | (83,147) | (60,463) |
Amounts reclassified from accumulated other comprehensive income | 1,636 | 721 |
Net current-period other comprehensive income (loss) | 1,636 | 721 |
Balance at the end of the period | (81,511) | (59,742) |
Derivatives | ||
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | (1,677) | (1,640) |
Other comprehensive income (loss) before reclassifications | 5,026 | 5,738 |
Amounts reclassified from accumulated other comprehensive income | (3,543) | (6,131) |
Net current-period other comprehensive income (loss) | 1,483 | (393) |
Balance at the end of the period | (194) | (2,033) |
Accumulated Other Comprehensive Income/(Loss) | ||
Accumulated other comprehensive income activity | ||
Balance at the beginning of the period | (341,948) | (310,504) |
Other comprehensive income (loss) before reclassifications | (37,203) | (3,881) |
Amounts reclassified from accumulated other comprehensive income | (1,907) | (5,410) |
Net current-period other comprehensive income (loss) | (39,110) | (9,291) |
Balance at the end of the period | $ (381,058) | $ (319,795) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (Reclassifications From Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Miscellaneous, net | $ (1,412) | $ 466 |
Interest expense | 8,388 | 9,214 |
Total before tax | (78,036) | (89,999) |
Tax benefit | 22,786 | 27,000 |
Total reclassifications for the period | (55,253) | (63,004) |
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Total reclassifications for the period | (1,907) | (5,410) |
Defined Benefit Pension Plans | Amount Reclassified from Accumulated Other Comprehensive Income | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Amortization of net loss | 2,062 | 852 |
Amortization of prior service cost | 97 | 113 |
Total before tax | 2,159 | 965 |
Tax benefit | (523) | (244) |
Total reclassifications for the period | 1,636 | 721 |
Derivatives | Amount Reclassified from Accumulated Other Comprehensive Income | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Total reclassifications for the period | (3,543) | (6,131) |
Derivatives | Cross Currency Swap Contract: Interest Component | Amount Reclassified from Accumulated Other Comprehensive Income | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Interest expense | (763) | (1,454) |
Derivatives | Cross Currency Swap Contract: Foreign Exchange Component | Amount Reclassified from Accumulated Other Comprehensive Income | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Miscellaneous, net | $ (2,780) | $ (4,677) |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Cash Flow Hedge) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Net after-tax loss included in accumulated other comprehensive earnings | $ (1,483) | $ 393 | ||
Derivatives in Cash Flow Hedging Relationships | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 5,026 | $ 6,069 | ||
Cross Currency Swap Contract | Derivatives in Cash Flow Hedging Relationships | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount hedged | $ 280,000 | |||
Net after-tax loss included in accumulated other comprehensive earnings | 200 | |||
Fair value of derivative asset | 6,800 | |||
Cross Currency Swap Contract: Interest Component | Derivatives in Cash Flow Hedging Relationships | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount expected to be recognized in earnings in next twelve months related to cross currency swap contract | $ 2,200 | |||
Notes payable | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Proceeds from debt | $ 280,000 | |||
Interest rate on notes (as a percent) | 1.36% | 1.36% | 1.36% |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Fair Value of Derivative Instruments in the Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Fair Value of Derivative Instruments | |||
Derivative Assets | $ 8,830 | $ 2,758 | |
Derivative Liabilities | 505 | 401 | |
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | 1,747 | $ (263) | |
Foreign Exchange Contracts | |||
Fair Value of Derivative Instruments | |||
Aggregate amount of forward exchange contracts | 56,100 | ||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | 1,747 | $ (263) | |
Derivative Contracts Not Designated as Hedging Instruments | |||
Fair Value of Derivative Instruments | |||
Derivative Assets | 2,061 | 206 | |
Derivative Liabilities | 505 | 401 | |
Derivative Contracts Not Designated as Hedging Instruments | Foreign Exchange Contracts | Prepaid and other | |||
Fair Value of Derivative Instruments | |||
Derivative Assets | 2,061 | 206 | |
Derivative Contracts Not Designated as Hedging Instruments | Foreign Exchange Contracts | Accounts payable and accrued liabilities | |||
Fair Value of Derivative Instruments | |||
Derivative Liabilities | 505 | 401 | |
Derivative Contracts Designated as Hedging Instruments | |||
Fair Value of Derivative Instruments | |||
Derivative Assets | 6,769 | 2,552 | |
Derivative Contracts Designated as Hedging Instruments | Cross Currency Swap Contract | Prepaid and other | |||
Fair Value of Derivative Instruments | |||
Derivative Assets | $ 6,769 | $ 2,552 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Effect of Derivative Instruments on the Consolidated Statements of Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative instruments, gain or (loss) | ||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | $ 1,747 | $ (263) |
Other Nonoperating Income (Expense) | (1,412) | 466 |
Interest Expense. | 8,388 | 9,214 |
Derivatives in Cash Flow Hedging Relationships | ||
Derivative instruments, gain or (loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 5,026 | 6,069 |
Amount of Gain (Loss) Reclassified from AOCI on Derivative | 3,543 | 6,131 |
Foreign Exchange Contracts | ||
Derivative instruments, gain or (loss) | ||
Foreign Exchange Contract, Amount of Gain (Loss) Recognized in Income on Derivative, not designated as hedging instruments | 1,747 | (263) |
Cross Currency Swap Contract: Interest Component | Interest expense | Derivatives in Cash Flow Hedging Relationships | ||
Derivative instruments, gain or (loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 2,246 | 1,392 |
Amount of Gain (Loss) Reclassified from AOCI on Derivative | 763 | 1,454 |
Interest Expense. | 8,388 | |
Cross Currency Swap Contract: Foreign Exchange Component | Other Income (Expense): Miscellaneous, net | Derivatives in Cash Flow Hedging Relationships | ||
Derivative instruments, gain or (loss) | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 2,780 | 4,677 |
Amount of Gain (Loss) Reclassified from AOCI on Derivative | 2,780 | $ 4,677 |
Other Nonoperating Income (Expense) | $ (1,412) |
DERIVATIVE INSTRUMENTS AND HE_6
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Schedule of Derivative Assets and Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative Assets | ||
Gross Amount | $ 8,830 | $ 2,758 |
Net Amounts Presented in the Statement of Financial Position | 8,830 | 2,758 |
Net Amount | 8,830 | 2,758 |
Derivative Liabilities | ||
Gross Amount | 505 | 401 |
Net Amounts Presented in the Statement of Financial Position | 505 | 401 |
Net Amount | $ 505 | $ 401 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2019 | May 31, 2019 |
Liabilities | ||||
Fair value of long-term obligations | $ 1,000,000 | $ 1,100,000 | ||
Gateway Analytical | ||||
Liabilities | ||||
Fair value of contingent consideration arrangement | 3,000 | 3,000 | $ 3,000 | |
Noble | ||||
Liabilities | ||||
Fair value of contingent consideration arrangement | 2,900 | 2,900 | $ 2,900 | |
Assets and liabilities measured at fair value on recurring basis | ||||
Assets | ||||
Foreign exchange contracts, assets | 2,061 | 206 | ||
Cross currency swap contract, asset | 6,769 | 2,552 | ||
Total assets at fair value | 8,830 | 2,758 | ||
Liabilities | ||||
Foreign exchange contracts, liabilities | 505 | 401 | ||
Fair value of contingent consideration arrangement | 5,930 | 5,930 | ||
Total liabilities at fair value | 6,435 | 6,331 | ||
Assets and liabilities measured at fair value on recurring basis | Level 2 | ||||
Assets | ||||
Foreign exchange contracts, assets | 2,061 | 206 | ||
Cross currency swap contract, asset | 6,769 | 2,552 | ||
Total assets at fair value | 8,830 | 2,758 | ||
Liabilities | ||||
Foreign exchange contracts, liabilities | 505 | 401 | ||
Total liabilities at fair value | 505 | 401 | ||
Assets and liabilities measured at fair value on recurring basis | Level 3 | ||||
Liabilities | ||||
Fair value of contingent consideration arrangement | 5,930 | 5,930 | ||
Total liabilities at fair value | $ 5,930 | $ 5,930 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2017 | |
Brazil | ||||
Commitments and contingencies | ||||
Accrual for Environmental Loss Contingencies | $ 400,000 | $ 1,500,000 | ||
Payments to settle environmental loss contingency | 100,000 | $ 600,000 | ||
Brazil | Reduction of gross receipts tax | ||||
Commitments and contingencies | ||||
Recovery of part of claim | $ 2,700,000 | |||
Brazil | Reduction of gross receipts tax | Cost of Sales | ||||
Commitments and contingencies | ||||
Recovery of part of claim | 1,700,000 | |||
Brazil | Reduction of gross receipts tax | Interest Income | ||||
Commitments and contingencies | ||||
Recovery of part of claim | $ 1,000,000 | |||
Brazil | Minimum | Reduction of gross receipts tax | ||||
Commitments and contingencies | ||||
Estimated potential gain contingency, recoveries | 2,000,000 | |||
Brazil | Maximum | Reduction of gross receipts tax | ||||
Commitments and contingencies | ||||
Estimated potential gain contingency, recoveries | 8,000,000 | |||
Indemnification agreements | ||||
Commitments and contingencies | ||||
Liabilities recorded under indemnification agreements | 0 | 0 | ||
Tax Assessment | Brazil | ||||
Commitments and contingencies | ||||
Estimated loss contingency | 6,100,000 | |||
Loss contingency liability recorded | 0 | |||
Tax Assessment, Interest | Brazil | ||||
Commitments and contingencies | ||||
Estimated loss contingency | 2,300,000 | |||
Tax Assessment, Penalites | Brazil | ||||
Commitments and contingencies | ||||
Estimated loss contingency | $ 800,000 | |||
Fire damage | France | ||||
Commitments and contingencies | ||||
Estimated potential gain contingency, recoveries | 0 | |||
Insurance receivable | $ 0 |
STOCK REPURCHASE PROGRAM (Detai
STOCK REPURCHASE PROGRAM (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2020 | Apr. 18, 2019 | |
Stock repurchase program | |||
Aggregate amount of share repurchases (in dollars) | $ 15,000 | ||
Common stock repurchased (retired and held in treasury) (in shares) | 159 | ||
Common stock repurchased (retired and held in treasury) | $ 15,000 | ||
Remaining authorized repurchase amount | $ 278,500 | ||
Stock Repurchase Program April 18, 2019 | |||
Stock repurchase program | |||
Share repurchases authorized amount | $ 350,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
STOCK-BASED COMPENSATION | ||
Proceeds from stock option exercises | $ 18,602 | $ 20,939 |
Stock options | ||
STOCK-BASED COMPENSATION | ||
Award vesting period | 3 years | |
Expiration period | 10 years | |
Compensation expense | $ 900 | 1,800 |
Compensation expense, net of tax | 700 | 1,500 |
Fair value of shares vested | 7,600 | 12,200 |
Proceeds from stock option exercises | 18,600 | |
Actual tax benefit realized for the tax deduction from option exercises | 4,800 | |
Unrecognized compensation cost expected to be recognized in future periods | $ 1,500 | |
Weighted-average period over which compensation cost is expected to be recognized | 10 months 24 days | |
Stock options | Selling, research & development and administrative expenses | ||
STOCK-BASED COMPENSATION | ||
Compensation expense | $ 700 | 1,600 |
Restricted stock units | ||
STOCK-BASED COMPENSATION | ||
Compensation expense | 8,300 | 4,700 |
Actual tax benefit realized for the tax deduction from option exercises | 1,500 | |
Unrecognized compensation cost expected to be recognized in future periods | $ 62,700 | |
Weighted-average period over which compensation cost is expected to be recognized | 2 years 3 months 18 days | |
Weighted-Average Grant-Date Fair Value | ||
Fair value of units vested | $ 9,300 | 2,700 |
Intrinsic value of units vested | $ 11,500 | $ 3,200 |
Restricted stock units (time-based) | ||
STOCK-BASED COMPENSATION | ||
Award vesting period | 3 years | |
Restricted stock unit activity | ||
Balance at the beginning of the period (in shares) | 480,729 | |
Granted (in shares) | 176,424 | |
Vested (in shares) | (112,515) | |
Forfeited (in shares) | (217) | |
Balance at the end of the period (in shares) | 544,421 | |
Weighted-Average Grant-Date Fair Value | ||
Nonvested at the beginning of the period (in dollars per share) | $ 95.45 | |
Granted (in dollars per share) | 81.75 | |
Vested (in dollars per share) | 82.64 | |
Forfeited (in dollars per share) | 100.14 | |
Nonvested at the end of the period (in dollars per share) | $ 92.11 | |
Restricted stock units (performance-based) | ||
STOCK-BASED COMPENSATION | ||
Award vesting period | 3 years | |
Assumptions used to estimate fair value of stock options granted | ||
Dividend Yield (as a percent) | 1.72% | 1.30% |
Expected Stock Price Volatility (as a percent) | 23.80% | 16.50% |
Risk-free Interest Rate (as a percent) | 0.31% | 2.19% |
Assumptions used to estimate fair value of restricted stock units granted | ||
Fair value per stock award (in dollars per share) | $ 94.98 | $ 134.97 |
Grant date stock price (in dollars per share) | $ 83.93 | $ 104.51 |
Expected Stock Price Volatility (as a percent) | 23.80% | 16.50% |
Expected average volatility of peer companies (as a percent) | 48.50% | 31.90% |
Correlation assumption (as a percent) | 63.50% | 37.40% |
Risk-free Interest Rate (as a percent) | 0.31% | 2.19% |
Dividend Yield (as a percent) | 1.72% | 1.30% |
Restricted stock unit activity | ||
Balance at the beginning of the period (in shares) | 181,680 | |
Granted (in shares) | 206,408 | |
Forfeited (in shares) | (589) | |
Balance at the end of the period (in shares) | 387,499 | |
Weighted-Average Grant-Date Fair Value | ||
Nonvested at the beginning of the period (in dollars per share) | $ 117.26 | |
Granted (in dollars per share) | 90.85 | |
Forfeited (in dollars per share) | 120.61 | |
Nonvested at the end of the period (in dollars per share) | $ 103.23 | |
Stock Awards Plans | Stock options | ||
Stock options activity | ||
Outstanding at the beginning of the period (in shares) | 5,044,180 | |
Exercised (in shares) | (292,090) | |
Forfeited or expired (in shares) | (6,630) | |
Outstanding at the end of the period (in shares) | 4,745,460 | |
Exercisable at the end of the period (in shares) | 4,583,864 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 68.32 | |
Exercised (in dollars per share) | 55.16 | |
Forfeited or expired (in dollars per share) | 65.60 | |
Outstanding at the end of the period (in dollars per share) | 69.20 | |
Exercisable at the end of the period (in dollars per share) | $ 68.43 | |
Weighted-Average Remaining Contractual Term (Years): | ||
Outstanding at the end of the period | 5 years 3 months 18 days | |
Exercisable at the end of the period | 5 years 1 month 6 days | |
Aggregate Intrinsic Value: | ||
Outstanding at the end of the period | $ 143,971 | |
Exercisable at the end of the period | 142,195 | |
Intrinsic Value of Options Exercised | $ 18,202 | $ 14,047 |
Director Stock Option Plans | Stock options | ||
Stock options activity | ||
Outstanding at the beginning of the period (in shares) | 135,251 | |
Exercised (in shares) | (21,251) | |
Outstanding at the end of the period (in shares) | 114,000 | |
Exercisable at the end of the period (in shares) | 114,000 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 58.45 | |
Exercised (in dollars per share) | 51.20 | |
Outstanding at the end of the period (in dollars per share) | 59.80 | |
Exercisable at the end of the period (in dollars per share) | $ 59.80 | |
Weighted-Average Remaining Contractual Term (Years): | ||
Outstanding at the end of the period | 3 years 2 months 12 days | |
Exercisable at the end of the period | 3 years 2 months 12 days | |
Aggregate Intrinsic Value: | ||
Outstanding at the end of the period | $ 4,530 | |
Exercisable at the end of the period | 4,530 | |
Intrinsic Value of Options Exercised | $ 1,385 | $ 51 |
Director Stock Option Plans | Restricted stock units | ||
STOCK-BASED COMPENSATION | ||
Award vesting period | 1 year | |
Director Stock Option Plans | Restricted stock units (time-based) | ||
Restricted stock unit activity | ||
Granted (in shares) | 11,490 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Earning per share | |||
Authorized common stock (in shares) | 199,000 | 199,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Income (Numerator) | |||
Income available to common stockholders, basic (in dollars) | $ 55,253 | $ 63,004 | |
Income available to common stockholders, diluted (in dollars) | $ 55,253 | $ 63,004 | |
Shares (Denominator) | |||
Basic (in shares) | 64,009 | 62,964 | |
Total average equivalent shares | 66,111 | 65,349 | |
Per Share Amount | |||
Net income per share, basic (in dollars per share) | $ 0.86 | $ 1 | |
Net income per share, diluted (in dollars per share) | $ 0.84 | $ 0.96 | |
Stock options | |||
Shares (Denominator) | |||
Effect of dilutive stock based compensation (in shares) | 1,810 | 2,222 | |
Restricted stock units | |||
Shares (Denominator) | |||
Effect of dilutive stock based compensation (in shares) | 292 | 163 |
SEGMENT INFORMATION (Summary of
SEGMENT INFORMATION (Summary of Reportable Segments) (Details) $ in Thousands | 3 Months Ended | 27 Months Ended | ||
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Financial information regarding the Company's reportable segments | ||||
Number of reportable segments | segment | 3 | |||
Net sales | $ 721,553 | $ 744,460 | ||
Acquisition related costs | (2,274) | |||
Total Restructuring Initiatives | 4,839 | 9,530 | ||
Depreciation and amortization | 50,806 | 47,489 | ||
Interest expense | (8,388) | (9,214) | ||
Interest income | 175 | 1,748 | ||
Income before Income Taxes | 78,036 | 89,999 | ||
Capital Expenditures | 61,625 | 51,742 | ||
Total Assets | 3,776,552 | $ 3,776,552 | $ 3,562,119 | |
Employee severance | ||||
Financial information regarding the Company's reportable segments | ||||
Total Restructuring Initiatives | 4,066 | |||
Business Transformation | ||||
Financial information regarding the Company's reportable segments | ||||
Total Restructuring Initiatives | 4,800 | 9,500 | ||
Capital Expenditures | $ 40,000 | |||
Beauty + Home | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 324,560 | 367,659 | ||
Adjusted EBITDA | 34,247 | 53,191 | ||
Total Restructuring Initiatives | 4,907 | 8,269 | ||
Pharma | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 297,196 | 272,701 | ||
Adjusted EBITDA | 108,342 | 97,357 | ||
Total Restructuring Initiatives | (31) | 326 | ||
Food + Beverage | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 99,797 | 104,100 | ||
Adjusted EBITDA | 15,407 | 16,691 | ||
Total Restructuring Initiatives | 103 | 510 | ||
Corporate & Other | ||||
Financial information regarding the Company's reportable segments | ||||
Adjusted EBITDA | (13,828) | (12,755) | ||
Total Restructuring Initiatives | (140) | 425 | ||
Operating segment | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 730,357 | 752,724 | ||
Operating segment | Beauty + Home | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 330,466 | 373,503 | ||
Operating segment | Pharma | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 299,590 | 274,494 | ||
Operating segment | Food + Beverage | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 100,301 | 104,727 | ||
Intersegment | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 8,804 | 8,264 | ||
Intersegment | Beauty + Home | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 5,906 | 5,844 | ||
Intersegment | Pharma | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | 2,394 | 1,793 | ||
Intersegment | Food + Beverage | ||||
Financial information regarding the Company's reportable segments | ||||
Net sales | $ 504 | $ 627 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Apr. 01, 2020 | Oct. 31, 2019 | Aug. 02, 2019 | Jun. 05, 2019 | May 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Acquisitions | ||||||||
Acquisition related costs | $ (2,274) | |||||||
Restricted cash included in prepaid and other | 4,003 | |||||||
Assets | ||||||||
Goodwill | 756,081 | $ 763,461 | ||||||
Bapco | ||||||||
Acquisitions | ||||||||
Ownership interest previously held | 20.00% | |||||||
Fusion Packaging | Subsequent Events | ||||||||
Acquisitions | ||||||||
Percentage of interest acquired | 100.00% | |||||||
Cost of acquired entity | $ 165,000 | |||||||
Earn-out provision payment maximum under the purchase agreement | $ 33,900 | |||||||
Term of earn-out provision | 3 years | |||||||
2019 Acquisitions | ||||||||
Acquisitions | ||||||||
Goodwill expected to be tax deductible | 29,600 | |||||||
Assets | ||||||||
Cash and equivalents | 3,427 | |||||||
Accounts receivable | 3,504 | |||||||
Prepaid and other | 2,478 | |||||||
Property, plant and equipment | 4,267 | |||||||
Goodwill | 59,143 | |||||||
Intangible assets | 52,980 | |||||||
Other miscellaneous assets | 430 | |||||||
Liabilities | ||||||||
Accounts payable, accrued and other liabilities | 5,388 | |||||||
Deferred income taxes | 2,592 | |||||||
Deferred and other non-current liabilities | 1,598 | |||||||
Net assets acquired | 116,651 | |||||||
Noble | ||||||||
Acquisitions | ||||||||
Percentage of interest acquired | 100.00% | |||||||
Acquisition of business, net of cash received | $ 62,300 | 463 | ||||||
Fair value of contingent consideration arrangement | 2,900 | 2,900 | 2,900 | |||||
Restricted cash included in prepaid and other | 5,000 | |||||||
Working capital escrow released | 1,000 | |||||||
Assets | ||||||||
Cash and equivalents | $ 1,600 | |||||||
Gateway Analytical | ||||||||
Acquisitions | ||||||||
Acquisition of business, net of cash received | $ 7,000 | |||||||
Fair value of contingent consideration arrangement | $ 3,000 | $ 3,000 | $ 3,000 | |||||
Nanopharm | ||||||||
Acquisitions | ||||||||
Acquisition of business, net of cash received | $ 38,100 | |||||||
Assets | ||||||||
Cash and equivalents | $ 1,800 | |||||||
Bapco | ||||||||
Acquisitions | ||||||||
Percentage of interest acquired | 80.00% | |||||||
Acquisition of business, net of cash received | $ 3,800 | |||||||
Assets | ||||||||
Cash and equivalents | $ 2,900 |
ACQUISITIONS (Acquired Intangib
ACQUISITIONS (Acquired Intangibles) (Details) - 2019 Acquisitions $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Acquired finite-lived intangible assets | |
Estimated Fair Value of Asset | $ 52,980 |
Acquired technology | |
Acquired finite-lived intangible assets | |
Weighted average useful life | 8 years |
Estimated Fair Value of Asset | $ 9,160 |
Customer relationships | |
Acquired finite-lived intangible assets | |
Weighted average useful life | 11 years |
Estimated Fair Value of Asset | $ 39,379 |
Trademarks and trade names | |
Acquired finite-lived intangible assets | |
Weighted average useful life | 4 years |
Estimated Fair Value of Asset | $ 2,457 |
License agreements and other | |
Acquired finite-lived intangible assets | |
Weighted average useful life | 1 year |
Estimated Fair Value of Asset | $ 1,984 |
INVESTMENT IN EQUITY SECURITI_3
INVESTMENT IN EQUITY SECURITIES (Details) € in Thousands, $ in Thousands | Apr. 01, 2020USD ($) | Oct. 01, 2019 | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2009EUR (€) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Aug. 31, 2019USD ($) |
Other Investments | $ 3,541 | $ 3,538 | |||||||
Total equity method and other investments | 39,167 | 8,396 | |||||||
Investment in unconsolidated affiliate | 20,423 | ||||||||
Proceeds from sale of investment in equity securities | $ 16,487 | ||||||||
Preferred equity stocks | |||||||||
Other Investments | $ 3,500 | ||||||||
Number of preferred equity investments | 2 | ||||||||
Investment impairment | 0 | ||||||||
BTY | |||||||||
Equity method investments | 31,043 | $ 31,000 | 119 | ||||||
Ownership percentage of equity method investment | 49.00% | ||||||||
Payment for equity method investment | 20,000 | ||||||||
Obligation associated with an agreement to acquire equity method investement | 11,000 | ||||||||
BTY | Strategic Definitive Agreement | |||||||||
Ownership percentage of equity method investment | 49.00% | ||||||||
Initial lock-up period | 5 years | ||||||||
Second lock-up period | 3 years | ||||||||
BTY | Strategic Definitive Agreement | Call Option | Minimum | |||||||||
Ownership percentage of equity method investment | 26.00% | ||||||||
BTY | Strategic Definitive Agreement | Call Option | Maximum | |||||||||
Ownership percentage of equity method investment | 31.00% | ||||||||
Kali Care | |||||||||
Equity method investments | 3,772 | 3,881 | |||||||
Investment in unconsolidated affiliate | $ 5,000 | ||||||||
Ownership percentage of equity method investment | 20.00% | ||||||||
Desotec GmbH | |||||||||
Equity method investments | $ 811 | $ 858 | |||||||
Investment in unconsolidated affiliate | € | € 574 | ||||||||
Ownership percentage of equity method investment | 23.00% | ||||||||
Healthcare, Inc. | Subsequent Events | |||||||||
Investment in unconsolidated affiliate | $ 5,000 | ||||||||
Ownership percentage of equity method investment | 30.00% |
RESTRUCTURING INITIATIVE (Detai
RESTRUCTURING INITIATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 27 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | |
Restructuring initiatives | |||
Capital Expenditures | $ 61,625 | $ 51,742 | |
Restructuring reserve | |||
Restructuring reserve, balance at the beginning of the period | 10,699 | ||
Expense recognized related to the plan | 4,839 | 9,530 | |
Cash paid | (3,572) | ||
Interest and FX impact | 178 | ||
Restructuring reserve, balance at the end of the period | 12,144 | $ 12,144 | |
Employee severance | |||
Restructuring reserve | |||
Restructuring reserve, balance at the beginning of the period | 7,090 | ||
Expense recognized related to the plan | 4,066 | ||
Cash paid | (503) | ||
Interest and FX impact | 187 | ||
Restructuring reserve, balance at the end of the period | 10,840 | 10,840 | |
Professional fees and other costs | |||
Restructuring reserve | |||
Restructuring reserve, balance at the beginning of the period | 3,609 | ||
Expense recognized related to the plan | 773 | ||
Cash paid | (3,069) | ||
Interest and FX impact | (9) | ||
Restructuring reserve, balance at the end of the period | 1,304 | 1,304 | |
Business Transformation | |||
Restructuring initiatives | |||
Expected implementation costs | 110,000 | 110,000 | |
Expected capital investments related to transformation plan | 50,000 | 50,000 | |
Cumulative expense incurred | 91,300 | 91,300 | |
Capital Expenditures | $ 40,000 | ||
Restructuring reserve | |||
Expense recognized related to the plan | 4,800 | 9,500 | |
Beauty + Home | |||
Restructuring reserve | |||
Expense recognized related to the plan | 4,907 | 8,269 | |
Pharma | |||
Restructuring reserve | |||
Expense recognized related to the plan | (31) | 326 | |
Food + Beverage | |||
Restructuring reserve | |||
Expense recognized related to the plan | 103 | 510 | |
Corporate & Other | |||
Restructuring reserve | |||
Expense recognized related to the plan | $ (140) | $ 425 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Events - Fusion Packaging $ in Millions | Apr. 01, 2020USD ($) |
Subsequent Event [Line Items] | |
Percentage of interest acquired | 100.00% |
Cost of acquired entity | $ 165 |