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Dec 31, 2022
Silgan Q4 2022 Earnings Report
Silgan reported mixed results for Q4 2022, with increased net sales but decreased net income compared to the same period in 2021.
Key Takeaways
Silgan Holdings Inc. reported a 1.1% increase in net sales for the fourth quarter of 2022, reaching $1.46 billion. However, net income decreased to $24.6 million, or $0.22 per diluted share, compared to $85.0 million, or $0.76 per diluted share, for the same period in 2021. Adjusted net income per diluted share for the fourth quarter of 2022 was a record $0.84, a 6% increase over the previous record of $0.79 in 2021.
Net sales for Q4 2022 increased by 1.1% to $1.46 billion compared to $1.44 billion in Q4 2021.
Net income for Q4 2022 was $24.6 million, or $0.22 per diluted share, compared to $85.0 million, or $0.76 per diluted share, for Q4 2021.
Adjusted net income per diluted share for Q4 2022 was a record $0.84, a 6% increase over the previous record of $0.79 in 2021.
The decrease in income before interest and income taxes was primarily due to higher rationalization charges of $64.6 million.
Silgan
Silgan
Silgan Revenue by Segment
Revenue by Segment
Dispensing & Specialty Closures Revenue
CapyFin.comMetal Containers Revenue
CapyFin.comCustom Containers Revenue
CapyFin.com Forward Guidance
The Company currently estimates that its adjusted net income per diluted share for the full year of 2023 will be in the range of $3.95 to $4.15, which includes a headwind of $0.20 per diluted share for additional interest expense, as compared to record adjusted net income per diluted share for the full year of 2022 of $4.01.
Positive Outlook
- Segment income in the Dispensing and Specialty Closures segment in 2023 is expected to increase significantly over the prior year primarily due to higher volumes and continued improvement in operating performance.
- Volumes in 2023 are expected to be higher than in 2022 as a result of continued growth in the beauty and fragrance markets, improved volume levels for hygiene and cleaning products as compared to the negative impact in 2022 from inventory management throughout the supply chain for these products and less customer pre-buy activity than in the prior year period.
- Segment income in the Metal Containers segment is expected to improve in 2023 as compared to 2022 as a result of higher unit volumes, due to continued growth in pet food products and less customer pre-buy activity than in the prior year period, and continued strong operating performance and cost improvements
- Segment income in the Custom Containers segment is expected to benefit from continued manufacturing efficiencies and anticipated higher volumes as a result of improved volume levels for home, personal care and lawn and garden products, and continued growth in pet food products
- Free cash flow in 2023 is expected to benefit from strong operating performance and improvements in working capital, partially offset by higher interest payments as a result of higher interest rates.
Challenges Ahead
- includes a headwind of $0.20 per diluted share for additional interest expense
- offset by the timing impact of exiting lower margin business in the latter half of 2022 that did not meet reinvestment return hurdles and replacing it with new business that will be commercialized in the fourth quarter of 2023.
- partially offset by the impact from the rationalization of operations in Russia.
- higher interest payments as a result of higher interest rates.
- The Company expects interest expense before loss on early extinguishment of debt of approximately $155 million in 2023, an increase of $28.7 million, or $0.20 per diluted share, primarily due to higher weighted average interest rates, partially offset by lower weighted average outstanding debt balances.
Revenue & Expenses
Visualization of income flow from segment revenue to net income