WEST PHARMACEUTICAL SERVICES INC
For the period ended Dec 31, 2024. Filed Feb 18, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 18, 2025
WST$399.81+1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-20.
0000105770-24-000015
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-18.
0000105770-25-000013
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 119 current paragraphs.
72 unchanged; 36 reworded; 11 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Macroeconomic Factors
Current report
During 2024, we recorded a tax benefit of $19.5 million associated with stock-based compensation.
Current report
(4)During 2023 and 2022, the Company recorded cost investment impairment charges of $4.3 million and $3.5 million, respectively.
Current report
Proprietary Products – Proprietary Products gross profit decreased by $133.5 million, or 12.9%, in 2024, including an unfavorable foreign currency translation impact of $2.1 million. Proprietary Products gross profit margin decreased by 4.5 margin points in 2024. The decrease is driven by lower plant absorption from reduced customer demand and an unfavorable shift in mix of products sold from HVP Components to HVP Delivery Devices. These headwinds were partially offset by increased sales prices and approximately $47 million in customer incentives earned in connection with volumes achieved during 2024, as compared to 2023.
Current report
Consolidated SG&A costs decreased by $14.9 million, or 4.2%, in 2024, including a favorable foreign currency translation impact of $0.5 million, primarily due to lower annual incentive compensation and a decrease in expense related to stock-based compensation, partially offset by increased salary and wages.
Current report
Proprietary Products –Proprietary Products SG&A costs decreased by $9.1 million, or 3.8%, in 2024, including a favorable foreign currency translation impact of$0.5 million. Proprietary Products SG&A costs decreased primarilydue to lower annual incentive compensation, partially offset by increased salary and wages.
Current report
Contract-Manufactured Products – Contract-Manufactured Products other expense (income) remained consistent in 2024 as compared to 2023.
Current report
Interest expense, net, decreased by $6.0 million, or 66.7%, in 2024, primarily due to an increase in capitalized interest.
Current report
Interest income decreased by $8.4 million in 2024, due primarily to the Company having a lower average cash balance during 2024, as compared to the same periods in 2023.
Current report
Other Nonoperating Expense (Income)
Current report
The increase in the effective tax rate in 2024 of 0.9% is primarily due to a decrease in the tax benefit related to stock-based compensation in 2024, as compared to 2023, partially offset by a decrease in our tax liability on unremitted earnings of our Germany subsidiaries due to a tax law change in 2024.
Removed paragraphs (13)
Previous report
Other Macroeconomic Factors
Previous report
Through the twelve months ended December 31, 2023, the war between Russia and Ukraine has not had a material impact on the Company’s business, financial condition or results of operations as we do not have manufacturing operations or significant commercial relationships in either country. However, the continuation of the Russia-Ukraine military conflict and/or an escalation of the conflict beyond its current scope may further weaken the global economy and could result in additional inflationary pressures and supply chain constraints, including the unavailability and cost of energy.
Previous report
During 2023, we also experienced higher costs for raw materials. Due to the uncertainty that exists relative to the duration and overall impact of the macroeconomic factors discussed above, our future operating performance, particularly in the short-term, may be subject to volatility. The impacts of macroeconomic conditions on our business, results of operations, financial condition and cash flows are dependent on certain factors, including those discussed in Item 1A. Risk Factors.
Previous report
During 2021, we recorded a tax benefit of $31.5 million associated with stock-based compensation.
Previous report
(2)During 2023, the Company recorded a cost investment impairment charge of $4.3 million. During 2022, the Company recorded a cost investment impairment charge of $3.5 million. During 2021, the net cost investment activity was equal to $4.3 million, inclusive of an impairment charge of $4.6 million partially offset by a $0.3 million gain on the sale of a cost investment.
Previous report
Proprietary Products – Proprietary Products gross profit decreased by $19.3 million, or 1.8%, in 2023, including a favorable foreign currency translation impact of $12.3 million. Proprietary Products gross profit margin decreased by 0.7 margin points in 2023. The decrease is driven by a decline in higher margin COVID-related sales, a decrease of approximately $21 million, net, in fees received from COVID-19 supply agreements, and inflationary pressures, primarily within compensation costs. These items were offset by increased sales prices.
Previous report
Consolidated SG&A costs increased by $36.5 million, or 11.5%, in 2023, primarily due to higher annual incentive compensation, increased compensation costs, an increase in fees related to professional services andan unfavorable foreign currency translation impact of $1.6 million.
Previous report
Proprietary Products –Proprietary Products SG&A costs increased by $28.0 million, or 13.2%, in 2023, primarily due to higher annual incentive compensation, anincrease in compensation costsand an unfavorable foreign currency translation impact of$1.3 million.
Previous report
Proprietary Products – Proprietary Products other expense (income) changed by $17.1 million in 2023 as compared to 2022, primarily due to a loss on foreign exchange transactions being recorded in 2023, while a gain on foreign exchange transactions was recorded during the same period in 2022. The losses on foreign exchange transactions in 2023 were primarily driven by a highly inflationary environment in Argentina. Additionally, the Company recorded a loss of$1.3 million related to oil hedges during 2023, while a gain of$1.5 million was recorded in the same period in 2022. This was offset by$2.3 million of expense related to contingent consideration being recorded during 2023, while expense of$3.0 million was recorded in the same period in 2022.
Previous report
Interest expense, net, increased by $1.1 million, or 13.9%, in 2023, primarily due to higher interest rates in 2023, as compared to 2022.
Previous report
Interest income increased by $22.9 million in 2023, due primarily from 2023 investments in highly liquid low-risk money market funds in the U.S., Europe, and South America yielding higher interest rates compared to 2022.
Previous report
Other Nonoperating (Income) Expense
Previous report
The increase in the effective tax rate in 2023 of 0.6%, or $7.6 million greater tax expense, is primarily due to a tax benefit of $20.3 million related to the termination of the U.S. pension plan recorded in 2022 and a $5.9 million tax benefit recorded as the result of a state tax valuation allowance reversal in 2022 that were not repeated in the same period in 2023. This was offset by an increase in the tax benefit related to stock-based compensation in 2023 of $32.0 million, as compared to the same period in 2022, which had a tax benefit related to stock-based compensation of $16.5 million.
Reworded paragraphs (36)
Previous wording
(3)During 2023, the Company recorded a benefit to restructuring and other charges of $2.0 million, which represents the net impact of a $2.8 million benefit within other expense (income)for revised severance estimates in connection with its 2022 restructuring plan andan inventory write down of$0.8 million within cost of goods and services sold. During 2022, the Company recorded expense to restructuring and other charges of $23.8 million, which primarily included a charge of $8.7 million in net severance and post-employment benefits primarily in connection with our plan to adjust our operating cost base and $15.3 million in asset-related charges associated with this plan. During 2021, the Company recorded expense to restructuring and other charges of $2.2 million to optimize certain organizational structures within the Company.
Current wording
(1)During 2024, the Company recorded expense to restructuring and other charges of $2.1 million. The net expense represents the impact of two items, the first of which is $4.6 million of expense recorded within selling, general and administrative expenses in connection with a plan to optimize the legal structure of the Company and its subsidiaries. The expense consists primarily of consulting fees, legal expenses, and other one-time costs directly attributable to this plan. This expense was partially offset by a $2.5 million benefit recorded within other expense (income) related to revised severance estimates in connection with the Company's 2022 restructuring plan. During 2023, the Company recorded a benefit to restructuring and other charges of $2.0 million, which represents the net impact of a $2.8 million benefit within other expense (income) for revised severance estimates in connection with its 2022 restructuring plan and an inventory write down of $0.8 million within cost of goods and services sold. During 2022, the Company recorded expense to restructuring and other charges of $23.8 million, which primarily included a charge of $8.7 million in net severance and post-employment benefits primarily in connection with our plan to adjust our operating cost base and $15.3 million in asset-related charges associated with this plan.
Previous wording
(4)During 2023, 2022 and 2021, the Company recorded $0.7 million, $0.7 million and $0.8 million, respectively, of amortization expense within operating profit associated with an acquisition of an intangible asset during the second quarter of 2020. Additionally, during 2023, 2022 and 2021, the company recorded $2.1 million of amortization expense in association with an acquisition of increased ownership interest in Daikyo.
Current wording
(2)During 2024, 2023 and 2022, the Company recorded $0.8 million, $0.7 million and $0.7 million, respectively, of amortization expense within operating profit associated with an acquisition of an intangible asset during the second quarter of 2020. Additionally, during 2024, 2023 and 2022, the company recorded $2.1 million of amortization expense in association with an acquisition of increased ownership interest in Daikyo.
Previous wording
(1)During 2023, the Company recorded expense of $11.6 million as a result of the sale of one of the Company’s manufacturing facilities within the Proprietary Products segment. The transaction closed during the second quarter of 2023. During 2021, the Company recorded a $2.8 million impairment charge for certain long-lived and intangible assets related to the Company's manufacturing facility within the Proprietary Products segment that was sold during the second quarter of 2023, as it determined the carrying value was not fully recoverable. $1.9 million of this charge was recorded within cost of goods and services sold and $0.9 million of the charge is recorded in selling, general, and administrative expense, due to the nature of the impaired assets.
Current wording
(3)During 2023, the Company recorded expense of $11.6 million as a result of the sale of one of the Company’s manufacturing facilities within the Proprietary Products segment. The transaction closed during the second quarter of 2023.
Previous wording
(5)During 2023, the Company recorded a benefit of $3.8 million within other nonoperating (income) expenseas a result of a favorable legal settlement related to a matter not included in our normal operations.
Current wording
(5)During 2023, the Company recorded a benefit of $3.8 million within other nonoperating expense (income)as a result of a favorable legal settlement related to a matter not included in our normal operations.
Previous wording
(6)During 2022, we recorded a gross pension settlement charge of $52.2 million within other nonoperating (income) expense, which primarily relates to the full settlement of the U.S. qualified defined benefit plan (the "U.S. pension plan"). In 2021, we recorded a pension settlement charge within other nonoperating (income) expense, as it was determined that normal-course lump-sum payments for our U.S. pension plan exceeded the threshold for settlement accounting. Please refer to Note 15, Benefit Plans, for further discussion of these items.
Current wording
(6)During 2022, we recorded a gross pension settlement charge of $52.2 million within other nonoperating expense (income), which primarily relates to the full settlement of the U.S. qualified defined benefit plan (the "U.S. pension plan"). Please refer to Note 15, Benefit Plans, for further discussion of these items.
Previous wording
(7)During 2022, the Company increased its expected tax benefit related to the prepayment of future royalties from one of its subsidiaries by $1.3 million. During 2021, the Company prepaid future royalties from one of its subsidiaries, which resulted in a $18.5 million tax benefit.
Current wording
(7)During 2022, the Company increased its expected tax benefit related to the prepayment of future royalties from one of its subsidiaries by $1.3 million.
Previous wording
(8)During 2022, the Company incurred additional tax expense of $5.7 million due to the impact of a tax law change in the state of Pennsylvania enacted during the period. During 2021, the Company recorded a tax benefit of $1.4 million due to the impact of a United Kingdom tax law change enacted during the period.
Current wording
(8)During 2022, the Company incurred additional tax expense of $5.7 million due to the impact of a tax law change in the state of Pennsylvania enacted during the period.
Previous wording
Consolidated net sales increased by $62.9 million, or 2.2%, in 2023, including a favorable foreign currency translation impact of $27.9 million. Excluding foreign currency translation effects and the impact related to the disposal of one of our plants of $11.5 million, consolidated net sales increased by $46.5 million, or 1.6%.
Current wording
Consolidated net sales decreased by $56.6 million, or 1.9%, in 2024, including an unfavorable foreign currency translation impact of $7.0 million. Excluding foreign currency translation effects and the impact related to the disposal of one of our plants of $4.3 million, consolidated net sales decreased by $45.3 million, or 1.5%.
Previous wording
Proprietary Products –Proprietary Products net sales decreased by $9.5 million, or 0.4%, in 2023, including a favorable foreign currency translation impact of $22.1 million. Excluding foreign currency translation effects and the impact related to the disposal of one of our plants of $11.5 million, net sales decreased by $20.1 million, or 0.8%, primarily due to a decline in COVID-related sales of approximately $320 million, offset by growth in our high-value components, primarily Westar®, Daikyo®and Envision®, as well as growth in high-value devices, such as self-injection systems and administration systems, and sales price increases.
Current wording
Proprietary Products –Proprietary Products net sales decreased by $62.8 million, or 2.6%, in 2024, including an unfavorable foreign currency translation impact of $6.9 million. Excluding foreign currency translation effects and the impact related to the disposal of one of our plants of $4.3 million, net sales decreased by $51.6 million, or 2.2%, due to a decline in sales of certain High-Value Product ("HVP") offerings due to customer inventory management, primarily FluroTec® products, Westar® components and Daikyo® components. These reductions were partially offset by an increase in sales of self-injection device platforms and increased sales prices, which includes approximately $47 million in customer incentives earned in connection with volumes achieved during 2024, as compared to 2023.
Previous wording
Contract-Manufactured Products – Contract-Manufactured Products net sales increased by $72.1 million, or 15.0%, in 2023, including a favorable foreign currency translation impact of $5.8 million. Excluding foreign currency translation effects, net sales increased by $66.3 million, or 13.8%, primarily due to an increase in the volume of sales of components associated with injection-related devices and healthcare diagnostic devices, as well as sales price increases.
Current wording
Contract-Manufactured Products – Contract-Manufactured Products net sales increased by $6.2 million, or 1.1%, in 2024, including an unfavorable foreign currency translation impact of $0.1 million. Excluding foreign currency translation effects, net sales increased by $6.3 million, or 1.1%, primarily due to an increase in sales of self-injection devices for obesity and diabetes and sales price increases, offset by a decrease in sales of healthcare diagnostic devices.
Previous wording
Consolidated gross profit decreased by $7.0 million, or 0.6%, in 2023, including a favorable foreign currency translation impact of $13.3 million. Consolidated gross profit margin decreased by 1.1 margin points in 2023.
Current wording
Consolidated gross profit decreased by $130.7 million, or 11.6%, in 2024, including an unfavorable foreign currency translation impact of $2.1 million. Consolidated gross profit margin decreased by 3.8 margin points in 2024.
Previous wording
Contract-Manufactured Products –Contract-Manufactured Products gross profit increased by $13.1 million, or 15.8%, in 2023, including a favorable foreign currency translation impact of $1.0 million. Contract-Manufactured Products gross profit margin increased by 0.1 margin points in 2023, due to sales price increases and a favorable mix of products sold, offset by inflationary pressures, primarily within compensation costs.
Current wording
Contract-Manufactured Products –Contract-Manufactured Products gross profit increased by $2.0 million, or 2.1%, in 2024. Contract-Manufactured Products gross profit margin increased by 0.1 margin points in 2024, primarily due to increased sales prices.
Previous wording
Consolidated R&D costs increased by $9.9 million, or 16.9%, in 2023, as compared to 2022, due to higher annual incentive compensation and additional research performed to identify new product opportunities. The increase in cost includes $3.5 million of incremental spend on research performed on glass systems. Efforts remain focused on the continued investment in elastomeric packaging components, formulation development, drug containment systems, self-injection systems and drug administration consumables.
Current wording
Consolidated R&D costs increased by $0.7 million, or 1.0%, in 2024, as compared to 2023, due to increased depreciation as a result of recent investments and increased salary and wages, offset by lower annual incentive compensation. Efforts remain focused on the continued investment in elastomeric packaging components, formulation development, drug containment systems, self-injection systems and drug administration consumable.
Previous wording
Contract-Manufactured Products –Contract-Manufactured Products SG&A costs increased by $3.5 million, or 16.7%, in 2023, primarily due to a higher allocation of corporate function spend and higher annual incentive compensation.
Current wording
Contract-Manufactured Products –Contract-Manufactured Products SG&A costs increased by $1.8 million, or 7.4%, in 2024, primarily due to increased salary and wages.
Previous wording
Corporate and unallocated items –Corporate SG&A costs increased by $5.0 million, or 6.0%, in 2023, primarily due to an increase in fees related to professional services and higher annual incentive compensation.
Current wording
Corporate and unallocated items –Corporate SG&A costs decreased by $7.6 million, or 8.6%, in 2024, due primarily to a decrease in expense related to stock-based compensation, lower annual incentive compensation and decreased fees related to professional services, partially offset by increased salary and wages.
Previous wording
Consolidated other expense (income) changed by $4.6 million in 2023 as compared to 2022, due to the factors described below.
Current wording
Consolidated other expense (income) changed by $10.4 million in 2024 as compared to 2023, due to the factors described below.
Previous wording
Contract-Manufactured Products – Contract-Manufactured Products other expense (income) changed by $2.1 million in 2023 as compared to 2022, primarily due to increased losses on foreign exchange transactions recorded in 2022, as compared to 2023.
Current wording
Proprietary Products – Proprietary Products other expense (income) changed by $7.2 million in 2024 as compared to 2023, primarily due to increased losses on foreign exchange transactions and increased expense related to contingent consideration being recorded in 2024, as compared to 2023.
Previous wording
Corporate and unallocated items – Corporate and unallocated items changed by$10.4 million in 2023 as compared to 2022. During 2022, we recorded $23.8 million in restructuring and other charges, while during 2023 we recorded a benefit to restructuring and other charges of$2.8 million. This was offset by the Company recording expense of$11.6 million as a result of the sale of one of the Company’s manufacturing facilities within the Proprietary Products segment in 2023 and additional cost investment impairments being recorded within Corporate in 2023, as compared to 2022.
Current wording
Corporate and unallocated items – Corporate and unallocated items changed by $17.6 million in 2024 as compared to 2023. This is primarily due to the Company recording expense of $11.6 million as a result of the sale of one of the Company’s manufacturing facilities within the Proprietary Products segment during 2023, which was not repeated in 2024. Additionally, the Company recorded additional asset impairments related to our cost method investments in 2023, as compared to 2024.
Previous wording
Consolidated operating profit decreased by $58.0 million, or 7.9%, in 2023, including a favorable foreign currency translation impact of $10.9 million, due to the factors described above.
Current wording
Consolidated operating profit decreased by $106.1 million, or 15.7%, in 2024, including an unfavorable foreign currency translation impact of $1.6 million, due to the factors described above.
Previous wording
Proprietary Products – Proprietary Products operating profit decreased by $74.3 million, or 9.5%, in 2023, including a favorable foreign currency translation impact of $10.1 million, due to the factors described above, most notably the decline in COVID-related sales.
Current wording
Proprietary Products – Proprietary Products operating profit decreased by $132.3 million, or 18.6%, in 2024, including an unfavorable foreign currency translation impact of $1.6 million, due to the factors described above, most notably lower gross profit driven by lower sales volume and an unfavorable mix of products sold.
Previous wording
Contract-Manufactured Products – Contract-Manufactured Products operating profit increased by $11.7 million, or 19.4%, in 2023, including a favorable foreign currency translation impact of $0.8 million, due to the factors described above, most notably an increase in sales of components associated with medical devices and diagnostic products.
Current wording
Contract-Manufactured Products – Contract-Manufactured Products operating profit increased by $0.2 million, or 0.3%, in 2024, due to the factors described above, most notably the increased sales prices.
Previous wording
Corporate and unallocated – Excluding the unallocated items, Corporate costs increased by $8.8 million, or 10.6%, in 2023, due to the factors described above.
Current wording
Corporate and unallocated – Excluding the unallocated items, Corporate costs decreased by $14.3 million, or 15.6%, in 2024, due to the factors described above, most notably the decrease in expense related to stock-based compensation and lower annual incentive compensation.
Previous wording
Other nonoperating (income) expense was $(3.0) million, $51.3 million and $(3.8) million for the years 2023, 2022, and 2021, respectively. Other nonoperating (income) expense changed by $54.3 million in 2023, primarily due to the recording of a$52.2 million pension settlement charge in 2022, which relieved the historical balance sheet position, inclusive of accumulated other comprehensive income, of the U.S. pension plan. This charge was not repeated in 2023.
Current wording
Other nonoperating expense (income) was $1.0 million, $(3.0) million and $51.3 million for the years 2024, 2023, and 2022, respectively. Other nonoperating expense (income) changed by $4.0 million in 2024, primarily due to a benefit from a favorable legal settlement recorded in 2023 that was not repeated in 2024.
Previous wording
The provision for income taxes was $122.3 million, $114.7 million, and $107.2 million for the years 2023, 2022, and 2021, respectively, and the effective tax rate was 17.5%, 16.9%, and 14.3%, respectively.
Current wording
The provision for income taxes was $107.5 million, $122.3 million, and $114.7 million for the years 2024, 2023, and 2022, respectively, and the effective tax rate was 18.4%, 17.5%, and 16.9%, respectively.
Previous wording
Equity in net income of affiliated companies was $17.7 million, $20.7 million, and $20.1 million for the years 2023, 2022, and 2021, respectively. Equity in net income of affiliated companies decreased by $3.0 million, or 14.5%, in 2023, primarily due to less favorable operating results at the Mexico affiliates.
Current wording
Equity in net income of affiliated companies was $14.7 million, $17.7 million, and $20.7 million for the years 2024, 2023, and 2022, respectively. Equity in net income of affiliated companies decreased by $3.0 million, or 16.9%, in 2024, primarily due to less favorable operating results at Daikyo.
Previous wording
Net cash provided by operating activities increased by $52.5 million in 2023, primarily due to favorable working capital management in 2023, as compared to 2022.
Current wording
Net cash provided by operating activities decreased by $123.1 million in 2024, primarily due to a decline in operating results.
Previous wording
Net cash used in investing activities increased by $80.5 million in 2023, due to an increase in capital expenditures for additional manufacturing capacity in 2023 to meet customer demand and improve manufacturing lead times.
Current wording
Net cash used in investing activities increased by $10.0 million in 2024, due to an increase in capital expenditures for additional manufacturing capacity to meet future customer demand.
Previous wording
Net cash used in financing activities increased by $166.0 million in 2023, primarily due to increases in purchases under our share repurchase program in 2023, as compared to 2022. This was partially offset by reduced debt repayments and increased proceeds from stock-based compensation awards in 2023, as compared to 2022.
Current wording
Net cash used in financing activities increased by $163.0 million in 2024, primarily due to increases in purchases under our share repurchase program, increased principal repayments on finance leases and decreased proceeds from stock-based compensation awards in 2024, as compared to 2023.
Previous wording
Cash and cash equivalents – Our cash and cash equivalents balance at December 31, 2023 consisted of cash held in depository accounts with banks around the world and cash invested in high-quality, short-term investments. The cash and cash equivalents balance at December 31, 2023 included $368.8 million of cash held by subsidiaries within the U.S. and $485.1 million of cash held by subsidiaries outside of the U.S. For further information on our position regarding permanent reinvestment of foreign subsidiary earnings and profits refer to Note 17, Income Taxes.
Current wording
Cash and cash equivalents – Our cash and cash equivalents balance at December 31, 2024 consisted of cash held in depository accounts with banks around the world and cash invested in high-quality, short-term investments. The cash and cash equivalents balance at December 31, 2024 included $94.4 million of cash held by subsidiaries within the U.S. and $390.2 million of cash held by subsidiaries outside of the U.S. For further information on our position regarding permanent reinvestment of foreign subsidiary earnings and profits refer to Note 17, Income Taxes.
Previous wording
Working capital - Working capital at December 31, 2023 decreased by $135.9 million, or 9.7%, as compared to December 31, 2022, which includes a favorable foreign currency translation impact of $25.4 million. Excluding the impact of currency exchange rates, inventories, other current assets and total current liabilities increased by $13.5 million, $30.4 million and $145.1 million, respectively, while cash and cash equivalents and accounts receivable decreased by$56.1 million and $4.0 million, respectively. The increase in other current assets was driven by net investment hedge assets, which moved from long-term to short-term during the period, and an increase in short-term income tax receivables. The increase in total current liabilities was driven primarily by a portion of long-term debt moving to short-term based on the stated maturity during the period, increases in accounts payable and a higher annual incentive compensation accrual. These increases were offset by a decrease in other current liabilities due to declines in deferred income andaccrued commissions, rebates and royalties. The decrease in cash and cash equivalents was due to capital expenditures and share repurchases in 2023, offset by cash collections driven by positive operating results during the period.
Current wording
Working capital - Working capital at December 31, 2024 decreased by $276.9 million, or 21.9%, as compared to December 31, 2023, which includes an unfavorable foreign currency translation impact of $41.8 million. Excluding the impact of currency exchange rates, cash and cash equivalents, total current liabilities and inventories decreased by $349.0 million, $103.3 million and $42.0 million, respectively, while accounts receivable increased by$58.8 million. The decrease in cash and cash equivalents was due to capital expenditures and share repurchases in 2024, offset by cash collections driven by positive operating results during the period. The decrease in total current liabilities was primarily due to the Company amending its Credit Facility Agreement during 2024. As part of this amendment, all current notes payable and other current debt amounts were repaid. The decrease in inventories and the increase in accounts receivable were both due to increased net sales leading up to the December 31, 2024 balance sheet date as compared to the December 31, 2023 balance sheet date.
Previous wording
Debt and credit facilities - The $2.1 million decrease in total debt at December 31, 2023, as compared to December 31, 2022, resulted primarily from debt repayments under our Term Loan.
Current wording
Debt and credit facilities - The $4.2 million decrease in total debt at December 31, 2024, as compared to December 31, 2023, is due to the net activity of debt repayments and borrowings as mentioned in Note 10, Debt.
Previous wording
Our sources of liquidity include our Credit Facility. At December 31, 2023, we had no outstanding borrowings under the Credit Facility. At December 31, 2023, the borrowing capacity available under the Credit Facility, including outstanding letters of credit of $2.4 million, was $497.6 million. We do not expect any significant limitations on our ability to access this source of funds. Please refer to Note 10, Debt, for further discussion of our Credit Facility.
Current wording
Our sources of liquidity include our multi-currency revolving credit facility. At December 31, 2024, we had no outstanding borrowings under the multi-currency revolving credit facility. At December 31, 2024, the borrowing capacity available under the multi-currency revolving credit facility, including outstanding letters of credit of $2.4 million, was $497.6 million. We do not expect any significant limitations on our ability to access this source of funds. Please refer to Note 10, Debt, for further discussion of our multi-currency revolving credit facility.
Previous wording
We believe that cash on hand and cash generated from operations, together with availability under our Credit Facility, will be adequate to address our foreseeable liquidity needs based on our current expectations of our business operations, capital expenditures and scheduled payments of debt obligations to continue to meet customer demand.
Current wording
We believe that cash on hand and cash generated from operations, together with availability under our multi-currency revolving credit facility, will be adequate to address our foreseeable liquidity needs based on our current expectations of our business operations, capital expenditures and scheduled payments of debt obligations.
Previous wording
•Our business creates a need to enter into various commitments with suppliers, including for the purchase of raw materialsand finished goods. In accordance with U.S. GAAP, these purchase obligations are not reflected in the accompanying consolidated balance sheets. At December 31, 2023, our outstanding unconditional contractual commitments, including for the purchase of raw materials and finished goods, amounted to $298.3 million, of which $76.8 million is due to be paid in 2024. These purchase commitments are in the normal course of business. The Company previously entered into a material supply agreement for butyl polymers used as a principal raw material in a broad range of the Company’s polymer-based pharmaceutical packaging products.
Current wording
•Our business creates a need to enter into various commitments with suppliers, including for the purchase of raw materialsand finished goods. In accordance with U.S. GAAP, these purchase obligations are not reflected in the accompanying consolidated balance sheets. At December 31, 2024, our outstanding unconditional contractual commitments, including for the purchase of raw materials and finished goods, amounted to $200.7 million, of which $46.7 million is due to be paid in 2025. These purchase commitments are in the normal course of business. The Company previously entered into a material supply agreement for butyl polymers used as a principal raw material in a broad range of the Company’s polymer-based pharmaceutical packaging products.
Previous wording
•Our operating lease obligations primarily related to land, buildings, and machinery and equipment, with lease terms through 2047 further discussed in Note 6, Leases.
Current wording
•Our lease obligations primarily related to land, buildings, and machinery and equipment, with lease terms through 2269 further discussed in Note 6, Leases.
Previous wording
Impairment of Goodwill and Other Intangible Assets: Goodwill is tested for impairment at least annually, following the completion of our annual budget and long-range planning process, or whenever circumstances indicate that the carrying value of these assets may not be recoverable. Goodwill is tested for impairment at the reporting unit level, which is the same as, or one level below, our operating segments. A goodwill impairment charge represents the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Considerable management judgment is necessary to estimate fair value. Amounts and assumptions used in our goodwill impairment test, such as future sales, future cash flows and long-term growth rates, are consistent with internal projections and operating plans. Amounts and assumptions used in our goodwill impairment test are also largely dependent on the continued sale of drug products delivered by injection and the packaging of drug products, as well as our timeliness and success in new-product innovation or the development and commercialization of proprietary multi-component systems. Changes in the estimate of fair value, including the estimate of future cash flows, could have a material impact on our future results of operations and financial position. Accounting guidance also allows entities to first assess qualitative factors, including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance, to determine whether it is necessary to perform the quantitative goodwill impairment test. If, based upon our qualitative assessment, we determined that it was not more likely than not that the fair value of each of our reporting units was less than its carrying amount, then it would not be necessary to perform the quantitative goodwill impairment test. We elected to follow this guidance for our annual impairment test in the prior year, however in the current year, 2023, we performed a quantitative analysis to support our historical qualitative assessments. No impairment in the carrying value of our reporting units was evident as a result of the quantitative assessment performed.
Current wording
Impairment of Goodwill and Other Intangible Assets: Goodwill is tested for impairment at least annually, following the completion of our annual budget and long-range planning process, or whenever circumstances indicate that the carrying value of these assets may not be recoverable. Goodwill is tested for impairment at the reporting unit level, which is the same as, or one level below, our operating segments. A goodwill impairment charge represents the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Considerable management judgment is necessary to estimate fair value. Amounts and assumptions used in our goodwill impairment test, such as future sales, future cash flows and long-term growth rates, are consistent with internal projections and operating plans. Amounts and assumptions used in our goodwill impairment test are also largely dependent on the continued sale of drug products delivered by injection and the packaging of drug products, as well as our timeliness and success in new-product innovation or the development and commercialization of proprietary multi-component systems. Changes in the estimate of fair value, including the estimate of future cash flows, could have a material impact on our future results of operations and financial position. Accounting guidance also allows entities to first assess qualitative factors, including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance, to determine whether it is necessary to perform the quantitative goodwill impairment test. If, based upon our qualitative assessment, we determined that it was not more likely than not that the fair value of each of our reporting units was less than its carrying amount, then it would not be necessary to perform the quantitative goodwill impairment test. We elected to follow this guidance for our annual impairment test. Based upon our assessment, we determined that it was not more likely than not that the fair value of each of our reporting units was less than its carrying amount and determined that it was not necessary to perform the quantitative goodwill impairment test in the current year.