SILGAN HOLDINGS INC

Previous wording

The following table sets forth certain unaudited income statement data expressed as a percentage of net sales for the periods presented:

Current wording

The following table sets forth certain unaudited income statement data expressed as a percentage of net sales for the three months ended March 31:

Previous wording

Summary unaudited results of operations for the periods presented are provided below.

Current wording

Summary unaudited results of operations for the three months ended March 31 are provided below.

Previous wording

Gross Profit. Gross profit margin increased 0.9 percentage points to 16.8 percent in the third quarter of 2024 and increased 0.7 percentage points to 17.4 percent in the first nine months of 2024 as compared to the same periods in 2023 primarily for the reasons discussed below in "Income before Interest and Income Taxes."

Current wording

Gross Profit. Gross profit margin increased 1.4 percentage points to 18.4 percent in the first quarter of 2025 as compared to the same period in 2024 primarily for the reasons discussed below in "Income before Interest and Income Taxes."

Previous wording

Selling, General and Administrative Expenses. In the third quarter of 2024, selling, general and administrative expenses as a percentage of consolidated net sales increased to 6.1 percent as compared to 4.7 percent in the third quarter of 2023. For the third quarter of 2024, selling, general and administrative expenses increased $22.1 million to $106.4 million as compared to the third quarter of 2023. In the first nine months of 2024, selling, general and administrative expenses as a percentage of consolidated net sales increased to 7.1 percent as compared to 6.2 percent in the first nine months of 2023. In the first nine months of 2024, selling, general and administrative expenses increased $26.8 million to $314.6 million as compared to the first nine months of 2023. The increase in selling, general and administrative expenses for the third quarter and the first nine months of 2024 was primarily due to $7.1 million and $12.6 million, respectively, of costs attributed to announced acquisitions and insurance proceeds received in the prior year periods.

Current wording

Selling, General and Administrative Expenses. In the first quarter of 2025, selling, general and administrative expenses as a percentage of consolidated net sales increased to 8.8 percent as compared to 7.6 percent in the first quarter of 2024. For the first quarter of 2025, selling, general and administrative expenses increased $28.6 million to $129.1 million as compared to the first quarter of 2024. The increase in selling, general and administrative expenses was primarily due to the inclusion of selling, general and administrative expenses of Weener Packaging and higher expenses for corporate development activities.

Previous wording

Provision for Income Taxes. For the third quarters of 2024 and 2023, the effective tax rates were 20.2 percent and 24.7 percent, respectively. For the first nine months of 2024 and 2023, the effective tax rates were 22.6 percent and 22.7 percent, respectively. The effective tax rate for the third quarter of 2024 was favorably impacted by the reversal of tax reserves due to the expiration of statutes of limitation. The effective tax rate for the first nine months of 2023 was favorably impacted by the reversal of tax reserves associated with a historical acquisition indemnity which unfavorably impacted corporate and interest expense in such period.

Current wording

Provision for Income Taxes. For the first quarters of 2025 and 2024, the effective tax rates were 23.8 percent and 24.5 percent, respectively.

Previous wording

Adjusted EBIT, a non-GAAP financial measure, means income before interest and income taxes excluding, as applicable, acquired intangible asset amortization expense, other pension (income) expense for U.S. pension plans, rationalization charges and costs attributed to announced acquisitions. Adjusted EBIT margin, a non-GAAP financial measure, means adjusted EBIT divided by segment net sales.

Current wording

Adjusted EBIT, a non-GAAP financial measure, means income before interest and income taxes excluding, as applicable, acquired intangible asset amortization expense, other pension (income) expense for U.S. pension plans, rationalization charges and costs attributed to announced acquisitions and including, as applicable, equity in earnings of affiliates, net of tax. Adjusted EBIT margin, a non-GAAP financial measure, means adjusted EBIT divided by segment net sales.

Previous wording

Acquired intangible asset amortization expense is a non-cash expense related to acquired operations that management believes is not indicative of the on-going performance of the acquired operations. Since the Company’s U.S. pension plans are significantly over funded and have no required cash contributions for the foreseeable future based on current regulations, management views other pension (income) expense from the Company’s U.S. pension plans, which excludes service costs, as not reflective of the operational performance of the Company or its segments. While rationalization costs are incurred on a regular basis, management views these costs more as an investment to generate savings rather than period costs. Costs attributed to announced acquisitions consist of third party fees and expenses that are viewed by management as part of the acquisition and not indicative of the on-going cost structure of the Company.

Current wording

Acquired intangible asset amortization expense is a non-cash expense related to acquired operations that management believes is not indicative of the on-going performance of the acquired operations. Since the Company’s U.S. pension plans are significantly over funded and have no required cash contributions for the foreseeable future based on current regulations, management views other pension (income) expense from the Company’s U.S. pension plans, which excludes service costs, as not reflective of the operational performance of the Company or its segments. While rationalization costs are incurred on a regular basis, management views these costs more as an investment to generate savings rather than period costs. Costs attributed to announced acquisitions consist of third party fees and expenses that are viewed by management as part of the acquisition and not indicative of the on-going cost structure of the Company. The Company's management views the operating performance of its affiliates which are joint ventures as part of the Company's operating performance and therefore believes that the Company's share of the net operating results of its affiliates which are joint ventures should be included in the Company's adjusted EBIT.

Previous wording

A reconciliation of such non-GAAP financial measures for the periods presented is provided below:

Current wording

A reconciliation of such non-GAAP financial measures for the three months ended March 31 is provided below:

Previous wording

In the third quarter of 2024, adjusted EBIT of the dispensing and specialty closures segment increased $1.4 million as compared to the third quarter of 2023, and adjusted EBIT margin increased to 16.9 percent from 16.8 percent over the same periods. The increase in adjusted EBIT was primarily due to improved manufacturing productivity and cost performance and a more favorable mix of products sold, partially offset by the unfavorable impact of foreign currency and lower unit volumes.

Current wording

In the first quarter of 2025, adjusted EBIT of the dispensing and specialty closures segment increased $21.4 million as compared to the first quarter of 2024, and adjusted EBIT margin increased to 14.8 percent from 14.5 percent over the same periods. The increase in adjusted EBIT was primarily due to the inclusion of adjusted EBIT from Weener Packaging, improved manufacturing productivity and cost performance, higher organic unit volumes and a more favorable mix of products sold, partially offset by the unfavorable impact of foreign currency.

Previous wording

In the third quarter of 2024, net sales for the metal containers segment decreased $72.0 million, or 6.6 percent, as compared to the third quarter of 2023. This decrease was primarily the result of the contractual pass through of lower raw material costs as compared to the lagged contractual pass through of inflation in labor and other manufacturing costs in the prior year period and a significantly less favorable mix of products sold, partially offset by higher unit volumes of approximately two percent and the impact of favorable foreign currency translation of approximately $2.0 million. Higher volumes for the pet food markets were partially offset by lower volumes for fruit and vegetable markets which were negatively impacted by a planned reduction in volumes by a large pack customer to reduce its working capital and severe weather that prematurely ended the fruit and vegetable packs.

Current wording

In the first quarter of 2025, net sales for the metal containers segment increased $11.3 million, or 1.8 percent, as compared to the first quarter of 2024. This increase was primarily the result of higher unit volumes of approximately four percent and the pass through of higher raw material costs, partially offset by a less favorable mix of products sold and the impact of unfavorable foreign currency translation of approximately $2.0 million. The increase in unit volumes was primarily due to higher volumes for pet food and soup markets.

Previous wording

In the third quarter of 2024, adjusted EBIT of the metal containers segment decreased $16.4 million as compared to the third quarter of 2023, and adjusted EBIT margin decreased to 9.5 percent from 10.4 percent for the same periods. The decrease in adjusted EBIT was primarily due to a significantly less favorable mix of products sold due to lower unit volumes for fruit and vegetable markets and higher selling, general and administrative costs, partially offset by higher unit volumes for pet food markets.

Current wording

In the first quarter of 2025, adjusted EBIT of the metal containers segment increased $4.6 million as compared to the first quarter of 2024, and adjusted EBIT margin increased to 7.9 percent from 7.3 percent for the same periods. The increase in adjusted EBIT was primarily due to improved manufacturing productivity and cost performance and higher unit volumes, partially offset by a less favorable mix of products sold due to higher unit volumes of smaller cans for pet food markets.

Previous wording

In the third quarter of 2024, net sales for the custom containers segment increased $9.4 million, or 6.3 percent, as compared to the third quarter of 2023. This increase was principally due to higher volumes of approximately five percent primarily driven by the commercialization of new business awards and the pass through of higher raw material costs, partially offset by the impact of unfavorable foreign currency translation of approximately $1.0 million.

Current wording

In the first quarter of 2025, net sales for the custom containers segment increased $3.2 million, or 2.0 percent, as compared to the first quarter of 2024. This increase was principally due to higher volumes of approximately two percent primarily driven by new business awards and the pass through of higher raw material costs, partially offset by the impact of unfavorable foreign currency translation of approximately $2.0 million.

Previous wording

In the third quarter of 2024, adjusted EBIT of the custom containers segment increased $8.2 million as compared to the third quarter of 2023, and adjusted EBIT margin increased to 12.6 percent from 7.9 percent over the same periods. The increase in adjusted EBIT was primarily attributable to a more favorable mix of products sold and higher volumes.

Current wording

In the first quarter of 2025, adjusted EBIT of the custom containers segment increased $4.4 million as compared to the first quarter of 2024, and adjusted EBIT margin increased to 14.7 percent from 12.3 percent over the same periods. The increase in adjusted EBIT was primarily attributable to improved manufacturing productivity and cost performance and higher volumes.

Previous wording

For the nine months ended September 30, 2023, we used net borrowings of revolving loans and proceeds from other foreign long-term debt of an aggregate of $847.5 million and cash and cash equivalents of $278.5 million (including the positive effect of exchange rate changes of $0.5 million) to fund cash used in operations of $596.0 million, repurchases of our common stock of $183.9 million, net capital expenditures and other investing activities of $170.6 million, decreases in outstanding checks of $61.4 million, dividends paid on our common stock of $59.7 million, the repayment of long-term debt of $52.7 million and the repayment of principal amounts under finance leases of $2.2 million.

Current wording

For the three months ended March 31, 2025, we used net borrowings of revolving loans of $1.1 billion, cash and cash equivalents of $469.9 million and the positive effect of exchange rate changes on cash and cash equivalents of $13.0 million to fund the repayment of long-term debt of $706.3 million, cash used in operations of $683.4 million, decreases in outstanding checks of $85.0 million, net capital expenditures and other investing activities of $82.5 million, dividends paid on our common stock of $21.9 million, repurchases of our common stock of $6.9 million and the repayment of principal amounts under finance leases of $1.3 million.

Previous wording

For the nine months ended September 30, 2024, we used net borrowings of revolving loans of $491.6 million and cash and cash equivalents of $274.4 million to fund cash used in operations of $213.9 million, decreases in outstanding checks of $160.6 million, the repayment of long-term debt of $100.0 million, net capital expenditures and other investing activities of $189.1 million, dividends paid on our common stock of $61.8 million, the repayment of principal amounts under finance leases of $27.3 million, repurchases of our common stock of $7.7 million and the negative effect of exchange rate changes on cash and cash equivalents of $5.6 million.

Current wording

For the three months ended March 31, 2024, we used net borrowings of revolving loans of $582.4 million and cash and cash equivalents of $334.3 million to fund cash used in operations of $547.8 million, decreases in outstanding checks of $160.6 million, the repayment of long-term debt of $100.0 million, net capital expenditures and other investing activities of $72.5 million, dividends paid on our common stock of $21.1 million, repurchases of our common stock of $7.7 million, the repayment of principal amounts under finance leases of $0.3 million and the negative effect of exchange rate changes on cash and cash equivalents of $6.7 million.

Previous wording

At September 30, 2024, we had $505.0 million of revolving loans outstanding under the Credit Agreement. After taking into account outstanding letters of credit, the available portion of revolving loans under the Credit Agreement at September 30, 2024 was $974.4 million.

Current wording

At March 31, 2025, we had $1.1 billion of revolving loans outstanding under the Credit Agreement. After taking into account outstanding letters of credit, the available portion of revolving loans under the Credit Agreement at March 31, 2025 was $398.2 million.

Previous wording

Because we sell metal containers and closures used in fruit and vegetable pack processing, we have seasonal sales. As is common in the industry, we must utilize working capital to build inventory and then carry accounts receivable for some customers beyond the end of the packing season. Due to our seasonal requirements, which generally peak sometime in the summer or early fall, we may incur short-term indebtedness to finance our working capital requirements. Our peak seasonal working capital requirements have historically averaged approximately $375 million. We fund seasonal working capital requirements through revolving loans under the Credit Agreement, other foreign bank loans and cash on hand. We may use the available portion of revolving loans under the Credit Agreement, after taking into account our seasonal needs and outstanding letters of credit, for other general corporate purposes including acquisitions, capital expenditures, dividends, stock repurchases and to refinance or repurchase other debt.

Current wording

Because we sell metal containers and closures used in fruit and vegetable pack processing, we have seasonal sales. As is common in the industry, we must utilize working capital to build inventory and then carry accounts receivable for some customers beyond the end of the packing season. Due to our seasonal requirements, which generally peak sometime in the summer or early fall, we may incur short-term indebtedness to finance our working capital requirements. Our peak seasonal working capital requirements have historically averaged approximately $375 million. We fund seasonal working capital requirements through revolving loans under the Credit Agreement, other foreign bank loans and cash on hand. We may use the available portion of revolving loans under the Credit Agreement, after taking into account our seasonal needs and outstanding

Previous wording

For our suppliers, we believe that we negotiate the best terms possible, including payment terms. In connection therewith, we initiated a SCF program with a major global financial institution. Under this SCF program, a qualifying supplier may elect, but is not obligated, to sell its receivables from us to such financial institution. A participating supplier negotiates its receivables sale arrangements directly with the financial institution under this SCF program. While we are not party to, and do not participate in the negotiation of, such arrangements, such financial institution allows a participating supplier to utilize our creditworthiness in establishing a credit spread in respect of the sale of its receivables from us as well as other applicable terms. This may provide a supplier with more favorable terms than it would be able to secure on its own. We have no economic interest in a supplier’s decision to sell a receivable. Once a qualifying supplier elects to participate in this SCF program and reaches an agreement with the financial institution, the supplier independently elects which individual invoices to us that they sell to the financial institution. All of our payments to a participating supplier are paid to the financial institution on the invoice due date under our agreement with such supplier, regardless of whether the individual invoice was sold by the supplier to the financial institution. The financial institution then pays the supplier on the invoice due date under our agreement with such supplier for any invoices not previously sold by the supplier to the financial institution. Amounts due to a supplier that elects to participate in this SCF program are included in accounts payable in our Condensed Consolidated Balance Sheet, and the associated payments are reflected in net cash provided by operating activities in our Condensed Consolidated Statements of Cash Flows. Separate from this SCF program, we and suppliers who participate in this SCF program generally maintain the contractual right to require the other party to negotiate in good faith the existing payment terms as a result of changes in market conditions, including changes in interest rates and general market liquidity, or in some cases for any reason. Outstanding trade accounts payables subject to this SCF program were approximately $284.2 million, $294.1 million and $330.2 million at September 30, 2024 and 2023 and December 31, 2023, respectively.

Current wording

For our suppliers, we believe that we negotiate the best terms possible, including payment terms. In connection therewith, we initiated a SCF program with a major global financial institution. Under this SCF program, a qualifying supplier may elect, but is not obligated, to sell its receivables from us to such financial institution. A participating supplier negotiates its receivables sale arrangements directly with the financial institution under this SCF program. While we are not party to, and do not participate in the negotiation of, such arrangements, such financial institution allows a participating supplier to utilize our creditworthiness in establishing a credit spread in respect of the sale of its receivables from us as well as other applicable terms. This may provide a supplier with more favorable terms than it would be able to secure on its own. We have no economic interest in a supplier’s decision to sell a receivable. Once a qualifying supplier elects to participate in this SCF program and reaches an agreement with the financial institution, the supplier independently elects which individual invoices to us that they sell to the financial institution. All of our payments to a participating supplier are paid to the financial institution on the invoice due date under our agreement with such supplier, regardless of whether the individual invoice was sold by the supplier to the financial institution. The financial institution then pays the supplier on the invoice due date under our agreement with such supplier for any invoices not previously sold by the supplier to the financial institution. Amounts due to a supplier that elects to participate in this SCF program are included in accounts payable in our Condensed Consolidated Balance Sheet, and the associated payments are reflected in net cash provided by operating activities in our Condensed Consolidated Statements of Cash Flows. Separate from this SCF program, we and suppliers who participate in this SCF program generally maintain the contractual right to require the other party to negotiate in good faith the existing payment terms as a result of changes in market conditions, including changes in interest rates and general market liquidity, or in some cases for any reason. Outstanding trade accounts payables subject to this SCF program were approximately $262.9 million, $252.6 million and $303.7 million at March 31, 2025 and 2024 and December 31, 2024, respectively.

Previous wording

Each of the 3¼% Senior Notes, the 4⅛% Senior Notes, the 2¼% Senior Notes and the 1.4% Senior Secured Notes were issued by Silgan and are guaranteed by our U.S. subsidiaries that also guarantee our obligations under the Credit Agreement, collectively the Obligor Group.

Current wording

Each of the 4⅛% Senior Notes, the 2¼% Senior Notes and the 1.4% Senior Secured Notes were issued by Silgan and are guaranteed by our U.S. subsidiaries that also guarantee our obligations under the Credit Agreement, collectively the Obligor Group.

Previous wording

The following summarized financial information relates to the Obligor Group as of September 30, 2024 and December 31, 2023 and for the nine months ended September 30, 2024. Intercompany transactions, equity investments and other intercompany activity within the Obligor Group have been eliminated from the summarized financial information. Investments in subsidiaries of Silgan that are not part of the Obligor Group of $1.7 billion and $1.6 billion as of September 30, 2024 and December 31, 2023, respectively, are not included in noncurrent assets in the table below.

Current wording

The following summarized financial information relates to the Obligor Group as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025. Intercompany transactions, equity investments and other intercompany activity within the Obligor Group have been eliminated from the summarized financial information. Investments in subsidiaries of Silgan that are not part of the Obligor Group of $2.2 billion and $2.1 billion as of March 31, 2025 and December 31, 2024, respectively, are not included in noncurrent assets in the table below.

Previous wording

At September 30, 2024 and December 31, 2023, the Obligor Group held current receivables due from other subsidiary companies of $19.7 million and $35.6 million, respectively; long-term notes receivable due from other subsidiary companies of $755.3 million and $748.8 million, respectively; and current payables due to other subsidiary companies of $14.5 million and $10.9 million, respectively.

Current wording

At March 31, 2025 and December 31, 2024, the Obligor Group held current receivables due from other subsidiary companies of $32.0 million and $33.0 million, respectively; long-term notes receivable due from other subsidiary companies of $1.1 billion in each of the periods; and current payables due to other subsidiary companies of $17.2 million and $19.0 million, respectively.

Previous wording

For the nine months ended September 30, 2024, net income in the table above excludes income from equity method investments of other subsidiary companies of $87.1 million. For the nine months ended September 30, 2024, the Obligor Group recorded the following transactions with other subsidiary companies: sales to such other subsidiary companies of $40.9 million; net credits from such other subsidiary companies of $19.5 million; and net interest income from such other subsidiary companies of $28.4 million. For the nine months ended September 30, 2024, the Obligor Group did not receive dividends from other subsidiary companies.

Current wording

For the three months ended March 31, 2025, net income in the table above excludes income from equity method investments of other subsidiary companies of $37.5 million. For the three months ended March 31, 2025, the Obligor Group recorded the following transactions with other subsidiary companies: sales to such other subsidiary companies of $16.0 million; net credits from such other subsidiary companies of $5.9 million; and net interest income from such other subsidiary companies of $12.7 million. For the three months ended March 31, 2025, the Obligor Group did not receive dividends from other subsidiary companies.

Previous wording

We continually evaluate cost reduction opportunities across each of our segments, including rationalizations of our existing facilities through plant closings and downsizings. We use a disciplined approach to identify opportunities that generate attractive cash returns. Under our rationalization plans, we made cash payments of $31.2 million and $8.9 million for the nine months ended September 30, 2024 and 2023, respectively. Excluding the impact of our withdrawal from the Central States Pension Plan in 2019, remaining expenses and cash expenditures for our rationalization plans are expected to be $6.9 million and $9.5 million, respectively. Remaining expenses for the accretion of interest for the withdrawal liability related to the Central States Pension Plan are expected to average approximately $0.8 million per year and be recognized annually through 2040, and remaining cash expenditures for the withdrawal liability related to the Central States Pension Plan are expected to be approximately $2.6 million annually through 2040.

Current wording

We continually evaluate cost reduction opportunities across each of our segments, including rationalizations of our existing facilities through plant closings and downsizings. We use a disciplined approach to identify opportunities that generate attractive cash returns. Under our rationalization plans, we made cash payments of $3.5 million and $11.8 million for the three months ended March 31, 2025 and 2024, respectively. Excluding the impact of our withdrawal from the Central States Pension Plan in 2019, remaining expenses and cash expenditures for our rationalization plans are expected to be $15.9 million and $20.3 million, respectively. Remaining expenses for the accretion of interest for the withdrawal liability related to the Central States Pension Plan are expected to average approximately $0.8 million per year and be recognized annually through 2040, and remaining cash expenditures for the withdrawal liability related to the Central States Pension Plan are expected to be approximately $2.6 million annually through 2040.

Previous wording

You should also read Note 15 to our Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2024 included elsewhere in this quarterly report.

Current wording

You should also read Note 3 to our Condensed Consolidated Financial Statements for the three months ended March 31, 2025 included elsewhere in this Quarterly Report.