Silgan Holdings ends 2013 with $1.7 billion debt, free cash flow of $260.7 million

By Lisa Kerner

Charlotte, N.C., Jan. 29 - Silgan Holdings Inc. ended 2013 with cash and cash equivalents of $160.5 million and current and long-term debt of $1.7 billion.

These figures compare to $465.6 million and $1.67 billion, respectively, for year-end 2012, according to the company's earnings news release.

"In 2013, we posted record adjusted net income per diluted share of $2.77 and strong free cash flow for the second consecutive year despite international economic challenges and unfavorable weather patterns," president and chief executive officer Tony Allott said.

Full-year net income was $185.4 million, compared to full-year 2012 net income of $151.3 million. Silgan reported fourth-quarter net income of $23.3 million, as compared to net income for the fourth quarter of 2012 of $29.4 million.

Free cash flow for 2013 was $260.7 million, or $4.03 per diluted share, and free cash flow yield was 8.4%.

For the prior year, Silgan posted free cash flow of $303.7 million.

The Stamford, Conn.-based manufacturer of packaging for consumer goods returned $267.6 million of cash to shareholders through the repurchase of about 5.9 million common shares.

Financial highlights

Net sales for the full year were up 3.3% at $3.71 billion, a result of an increase in net sales across all businesses. Fourth-quarter net sales were up 0.7% at $864.8 million.

Interest and other debt expense before loss on early extinguishment of debt for 2013 was $67.4 million, up $4.4 million from 2012 due to higher average outstanding borrowings.

Silgan reported a loss on early extinguishment of debt of $2.1 million in 2013 as a result of the prepayment of $300.9 million of term debt under the previous senior secured credit facility.

Fourth-quarter 2013 interest and other debt expense totaled $19.6 million, an increase of $4.2 million from the prior-year period.

Looking ahead, Silgan estimates its adjusted net income per diluted share for the full year 2014 will be in the range of $3.10 to $3.30.

The company expects interest expense before the loss on early extinguishment of debt to increase in 2014 to a full year of expense from the 5½% senior notes issued in September 2013.

Silgan estimates free cash flow of about $200 million in 2014.

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