<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) of the Securities Exchange
Act of 1934 for the Quarter Ended March 31, 1998 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) of the Securities Exchange
Act of 1934 for the Period ____________ to ____________.
Commission file number 000-22117
SILGAN HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1269834
(State of Incorporation) (I.R.S. Employer Identification Number)
4 Landmark Square
Stamford, Connecticut 06901
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (203) 975-7110
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
As of May 1, 1998, the number of shares outstanding of the registrant's common
stock, $0.01 par value, was 19,010,617.
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Part I. Financial Information
Item 1. Financial Statements
SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<S> <C> <C> <C>
March 31, March 31, Dec. 31,
1998 1997 1997
---- ---- ----
ASSETS (unaudited) (unaudited) (audited)
Current assets:
Cash and cash equivalents ................... $ 4,042 $ 5,860 $ 53,718
Accounts receivable, net .................... 132,109 104,730 125,837
Inventories ................................. 276,272 248,679 209,963
Prepaid expenses and other current assets ... 10,566 11,046 9,997
----------- ----------- -----------
Total current assets .................... 422,989 370,315 399,515
Property, plant and equipment, net ............... 537,724 496,197 531,765
Other non-current assets ......................... 121,146 122,898 119,287
----------- ----------- -----------
$ 1,081,859 $ 989,410 $ 1,050,567
=========== =========== ===========
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable ...................... $ 113,354 $ 106,212 $ 142,281
Accrued payroll and related costs ........... 43,178 43,013 40,621
Accrued interest payable .................... 15,679 12,105 10,939
Accrued expenses and other current
liabilities .............................. 21,161 35,874 20,871
Bank revolving loans ........................ 44,595 88,400 --
Current portion of long-term debt ........... 1,867 29,547 20,218
----------- ----------- -----------
Total current liabilities ............... 239,834 315,151 234,930
Long-term debt ................................... 803,468 634,843 785,036
Other long-term liabilities ...................... 98,839 74,632 97,849
Cumulative exchangeable redeemable
preferred stock ............................... -- 54,748 --
Deficiency in stockholders' equity:
Common stock ................................ 189 189 189
Additional paid-in capital .................. 111,079 110,935 110,935
Accumulated deficit ......................... (171,195) (200,274) (177,864)
Accumulated other comprehensive income ...... (355) (814) (508)
----------- ----------- -----------
Total deficiency in stockholders' equity (60,282) (89,964) (67,248)
----------- ----------- -----------
$ 1,081,859 $ 989,410 $ 1,050,567
=========== =========== ===========
See accompanying notes.
</TABLE>
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SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per common share amounts)
Three Months Ended
------------------
March 31, March 31,
1998 1997
---- ----
Net sales ........................................ $ 334,413 $ 299,427
Cost of goods sold ............................... 290,089 256,708
----------- ------------
Gross profit ................................ 44,324 42,719
Selling, general and administrative expenses ..... 15,663 14,035
Non-cash stock option charge ..................... -- 22,522
----------- ------------
Income from operations ...................... 28,661 6,162
Interest expense and other related financing costs 17,963 19,965
----------- ------------
Income (loss) before income taxes ........... 10,698 (13,803)
Income tax provision (benefit) ................... 4,029 (24,850)
----------- ------------
Income before extraordinary charge .......... 6,669 11,047
Extraordinary charge relating to early
extinguishment of debt, net of taxes .......... -- (742)
----------- ------------
Net income before preferred stock
dividend requirement ..................... 6,669 10,305
Preferred stock dividend requirement ............. -- (1,755)
----------- ------------
Net income available to common stockholders . $ 6,669 $ 8,550
=========== ============
Basic earnings per common share:
Income before extraordinary charges ......... $ 0.35 $ 0.64
Extraordinary charges ....................... -- (0.04)
Preferred stock dividend requirement ........ -- (0.10)
----------- ------------
Net income per common share ...................... $ 0.35 $ 0.50
=========== ============
Diluted earnings per common share:
Income before extraordinary charges ......... $ 0.33 $ 0.60
Extraordinary charges ....................... -- (0.04)
Preferred stock dividend requirement ........ -- (0.10)
----------- ------------
Net income per common share ...................... $ 0.33 $ 0.46
=========== ============
Weighted average shares outstanding:
Basic ....................................... 18,868,567 17,086,722
Diluted ..................................... 20,205,308 18,466,847
See accompanying notes.
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SILGAN HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended
------------------
March 31, March 31,
1998 1997
---- ----
Cash flows from operating activities:
Net income before preferred stock
dividend requirement ........................ $ 6,669 $ 10,305
Adjustments to reconcile net income before
preferred stock dividend requirement to
net cash used in operating activities:
Depreciation ................................ 16,222 13,714
Amortization ................................ 1,183 1,725
Extraordinary charge relating to early
extinguishment of debt, net of taxes ..... -- 742
Non-cash stock option charge ................ -- 22,522
Changes in assets and liabilities, net of
effect of acquisitions:
(Increase) in accounts receivable ...... (4,121) (3,227)
(Increase) in inventories .............. (64,660) (52,987)
(Increase) decrease in other non-current
assets ............................... 2,436 (17,148)
(Decrease) in trade accounts payable ... (28,927) (16,411)
Other, net ............................. 8,617 (4,137)
--------- ---------
Total adjustments .................. (69,250) (55,207)
--------- ---------
Net cash used in operating activities ....... (62,581) (44,902)
--------- ---------
Cash flows from investing activities:
Acquisition of business ......................... (14,110) --
Capital expenditures, net ....................... (17,518) (10,255)
--------- ---------
Net cash used in investing activities ....... (31,628) (10,255)
--------- ---------
Cash flows from financing activities:
Borrowings under working capital loans .......... 217,755 279,750
Repayments under working capital loans .......... (159,050) (219,150)
Net proceeds from issuance of common stock ...... -- 67,220
Proceeds from issuance of long-term debt ........ 4,193 --
Repayment of long-term debt ..................... (18,365) (67,820)
--------- ---------
Net cash provided by financing activities ... 44,533 60,000
--------- ---------
Net increase in cash and cash equivalents ............ (49,676) 4,843
Cash and cash equivalents at beginning of year ....... 53,718 1,017
--------- ---------
Cash and cash equivalents at end of period ........... $ 4,042 $ 5,860
========= =========
Supplementary data:
Cash interest payments .......................... $ 12,902 $ 16,253
Cash income tax (refunds) payments .............. 1,006 (56)
Preferred stock issued in lieu of cash dividend . -- 1,702
See accompanying notes.
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<TABLE>
SILGAN HOLDINGS INC.
CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
(Dollars and shares in thousands)
<S> <C> <C> <C> <C> <C> <C>
Common Stock Accumulated Total
------------ Additional other deficiency in
Par paid-in Accumulated comprehensive stockholders'
Shares Value capital deficit income equity
------ ----- ------- ------- ------ ------
Balance at December 31, 1997 .................. 18,863 $189 $110,935 $(177,864) $(508) $(67,248)
Net income ................................. -- -- -- 6,669 -- 6,669
Foreign currency translation ............... -- -- -- -- 153 153
Proceeds from exercise of
shares through employee
stock option plans, including
tax benefit of $120 ..................... 12 -- 144 -- -- 144
------ ---- -------- --------- ----- --------
Balance at March 31, 1998 ..................... 18,875 $189 $111,079 $(171,195) $(355) $(60,282)
====== ==== ======== ========= ===== ========
See accompanying notes.
</TABLE>
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at March 31, 1998 and 1997 and for the
three months then ended is unaudited)
1. Basis of Presentation
The accompanying condensed unaudited consolidated financial statements of Silgan
Holdings Inc. ("Holdings" or the "Company") have been prepared in accordance
with Rule 10-01 of Regulation S-X and, therefore, do not include all information
and footnotes necessary for a fair presentation of financial position, results
of operations and cash flows in conformity with generally accepted accounting
principles. All adjustments of a normal recurring nature have been made,
including appropriate estimates for reserves and provisions which are normally
determined or settled at year end. In the opinion of the Company, the
accompanying financial statements contain all adjustments (consisting solely of
a normal recurring nature) necessary to present fairly Holdings' financial
position as of March 31, 1998 and 1997 and December 31, 1997, and Holdings'
results of operations and statements of cash flows for the three months ended
March 31, 1998 and 1997.
While the Company believes that the disclosures presented are adequate to make
the information not misleading, it is suggested that these financial statements
be read in conjunction with Holdings' financial statements and notes included in
its Annual Report on Form 10-K for the year ended December 31, 1997.
In addition, certain reclassifications have been made to prior year's financial
statements to conform with current year presentation.
2. Earnings per Share
Earnings per share amounts for 1997 have been restated to conform with the
requirements of Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share". Under SFAS No. 128, primary and fully diluted earnings per
share were replaced with basic and diluted earnings per share. Unlike primary
earnings per share, basic earnings per share excludes the dilutive effect of
stock options. The number of common stock equivalents included in diluted
weighted average shares outstanding at March 31, 1998 and March 31, 1997 were
1,336,741 and 1,380,125, respectively, all of which represented outstanding
employee stock options.
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at March 31, 1998 and 1997 and for the
three months then ended is unaudited)
3. Comprehensive Income
As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income". SFAS No. 130 establishes standards for the reporting and
display of comprehensive income and its components. The adoption of SFAS No. 130
had no impact on the Company's results of operations or stockholders' equity.
Prior year's financial statements have been reclassified to conform to the
requirements of SFAS No. 130.
SFAS No. 130 requires foreign currency translation adjustments to be included in
comprehensive income. Foreign currency translation adjustments were previously
included as a separate component of stockholders' equity. The components of
comprehensive income for the three month periods ended March 31, 1998 and 1997
are as follows (in thousands):
1998 1997
---- ----
Net income ......................................... $6,669 $ 8,550
Foreign currency translation adjustments ........... 153 (40)
------ -------
Comprehensive income ........................... $6,822 $ 8,510
====== =======
The components of accumulated other comprehensive income at March 31, 1998,
March 31, 1997, and December 31, 1997 consist solely of foreign currency
translation adjustments.
4. Acquisitions
In January 1998, Silgan Plastics Corporation, a wholly owned subsidiary of
Holdings ("Plastics"), acquired substantially all of the assets of Winn
Packaging Co. ("Winn") for a purchase price of approximately $14.1 million
(including net working capital of approximately $4.0 million). Winn was a
privately held manufacturer and marketer of decorated rigid plastic containers,
serving the personal care, automotive, and household chemical markets. Winn's
sales in 1997 were approximately $22.0 million. The Company financed this
acquisition through revolving loan borrowings under its U.S. Credit Agreement.
The transaction was accounted for using the purchase method of accounting, and
accordingly a preliminary purchase price allocation has been made based on the
fair value of the assets acquired and liabilities assumed as of the date of
acquisition. The purchase price allocation will be adjusted during 1998 for
differences between actual and preliminary valuations for asset appraisals. The
excess of the purchase price over the fair value of the net assets acquired of
$5.5 million has been recorded as goodwill, and is being amortized over 40
years.
<PAGE>
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at March 31, 1998 and 1997 and for the
three months then ended is unaudited)
5. Inventories
Inventories consisted of the following (in thousands):
March 31, March 31, Dec. 31,
1998 1997 1997
---- ---- ----
Raw materials and supplies ........... $ 33,191 $ 32,718 $ 33,706
Work-in-process ...................... 54,521 43,444 43,529
Finished goods ....................... 178,754 161,577 121,369
Spare parts and other ................ 8,731 7,977 8,382
-------- -------- --------
275,197 245,716 206,986
Adjustment to value inventory
at cost on the LIFO Method ........ 1,075 2,963 2,977
-------- -------- --------
$276,272 $248,679 $209,963
======== ======== ========
6. Income Taxes
During the first quarter of 1997, the Company determined that a portion of the
future tax benefits arising from its net operating loss carryforward would be
realized due to the Company's continued improvement in earnings and increased
probability of future taxable income. In accordance with SFAS No. 109, the
Company reduced its valuation allowance and recognized an income tax benefit of
23.2 million.
The provision for income taxes for the three months ended March 31, 1998 was
recorded at an effective tax rate of 37.7%, which represents the Company's
estimated annual effective tax rate for 1998.
7. Exchangeable Redeemable Preferred Stock
As of March 31, 1997, the Company had outstanding 53,258 shares of 13 1/4%
Cumulative Exchangeable Redeemable Preferred Stock ("Preferred Stock"), with a
liquidation preference of $1,000 per share. Included in Preferred Stock at March
31, 1997 were accrued dividends of $1.5 million. On April 15, 1997, the Company
made its quarterly dividend payment of $1.8 million in additional shares of
Preferred Stock.
The Preferred Stock was exchanged into the Company's 13 1/4% Subordinated
Debentures due 2006 (the "13 1/4% Debentures") in June 1997.
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SILGAN HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Information at March 31, 1998 and 1997 and for the
three months then ended is unaudited)
8. Pending Acquisition
In February 1998, the Company reached an agreement in principle with Campbell
Soup Company ("Campbell") for the purchase of Campbell's can manufacturing
assets. Although the transaction is subject to negotiation and execution of
definitive documentation and other customary terms and conditions, it is
expected that the purchase price will be approximately $125.0 million. The
purchase price will be determined at the closing of the transaction. The Company
expects to finance this acquisition with revolving loans under its U.S. Credit
Agreement. As part of the transaction, the Company and Campbell will enter into
a long-term supply agreement. Annual sales to Campbell under the supply
agreement are expected to be in excess of $200.0 million. The Company
anticipates that the closing of the transaction will occur in the late spring of
this year.
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Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Statements included in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this Quarterly Report on
Form 10-Q which are not historical facts are "forward-looking statements" made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and Securities Exchange Act of 1934. Such forward-looking
statements are made based upon management's expectations and beliefs concerning
future events impacting the Company and therefore involve a number of
uncertainties and risks, including, but not limited to, those described in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997
and the Company's other filings with the Securities and Exchange Commission. As
a result, the actual results of operations or financial condition of the Company
could differ materially from those expressed or implied in such forward-looking
statements.
RESULTS OF OPERATIONS - THREE MONTHS
Summary unaudited results of operations for the Company's two business segments,
metal and plastic containers, for the three months ended March 31, 1998 and 1997
are provided below.
Three Months Ended March 31,
----------------------------
1998 1997
---- ----
(In millions)
Net sales:
Metal containers and specialty .............. $ 259.2 $ 242.2
Plastic containers .......................... 75.2 57.2
------ ------
Consolidated ............................ $ 334.4 $ 299.4
====== ======
Operating profit:
Metal containers and specialty .............. $ 19.1 $ 22.3
Plastic containers .......................... 10.0 6.8
Non-cash stock option charge ................ -- (22.5)
Corporate expense ........................... (0.4) (0.4)
------ ------
Consolidated ............................ $ 28.7 $ 6.2
====== ======
Three Months Ended March 31, 1998 Compared with Three Months ended March 31,
1997
Net Sales. Consolidated net sales increased $35.0 million, or 11.7%, to $334.4
million for the three months ended March 31, 1998, as compared to net sales of
$299.4 million for the same three months in the prior year. This increase
resulted primarily from incremental sales added from acquisitions and to a
lesser extent from increased unit sales to existing plastic container customers.
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Net sales for the metal container business (including net sales of its specialty
business of $29.9 million) were $259.2 million for the three months ended March
31, 1998, an increase of $17.0 million, or 7.0%, from net sales of $242.2
million for the same period in 1997. Net sales of metal food cans increased
slightly during the first quarter of 1998 to $229.3 million, as compared to
$223.2 million for the same period in 1997.
Sales of specialty items included in the metal container segment increased $10.9
million to $29.9 million during the three months ended March 31, 1998, as
compared to $19.0 million in the same period in 1997, predominately due to
incremental sales added from the April 1997 acquisition of the aluminum roll-on
closure business.
Net sales for the plastic container business of $75.2 million during the three
months ended March 31, 1998 increased $18.0 million, or 31.5%, from net sales of
$57.2 million for the same period in 1997. The additional sales were generated
by incremental sales added from the acquisition of Winn in January 1998 and the
acquisition in April 1997 of the North American plastic container business of
Rexam plc and by higher unit volume with existing customers.
Cost of Goods Sold. Cost of goods sold as a percentage of consolidated net sales
was 86.8% ($290.1 million) for the three months ended March 31, 1998, an
increase of 1.1 percentage points as compared to 85.7% ($256.7 million) for the
same period in 1997. The decline in gross profit margins was primarily
attributable to price concessions made to several contractual metal food can
customers in exchange for contract term extensions with such customers, offset
in part, by an increase in the gross profit margin of the plastic container
business.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses as a percentage of consolidated net sales for the three
months ended March 31, 1998 and 1997 remained constant at 4.7% ($15.6 million
and $14.0 million, respectively).
Income from Operations. Income from operations as a percentage of consolidated
net sales was 8.6% for the three months ended March 31, 1998, as compared with
2.1% for the same period in the prior year. Excluding the effect of the non-cash
stock option charge of $22.5 million incurred in connection with the Company's
initial public offering (the "IPO") of its common stock in 1997, income from
operations as a percentage of consolidated net sales declined 1.0 percentage
point to 8.6% for the three months ended March 31, 1998, as compared with 9.6%
for the same period in the prior year. This decrease was a result of the
aforementioned decline in gross profit margins. Excluding the effect of the
non-cash stock option charge, income from operations for the three months ended
March 31, 1998 and 1997 remained constant at $28.7 million.
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In conjunction with the IPO, stock options issued under the stock option plans
of Holdings' subsidiaries were converted to Holdings stock options. In
accordance with generally accepted accounting principles, the Company recorded a
charge of $22.5 million at the time of the IPO for the excess of the fair market
value of the stock options issued under the subsidiary stock option plans over
the grant price of the options. The Company will not recognize any future
charges for these stock options.
Income from operations as a percentage of net sales for the metal container
business declined 1.8 percentage points to 7.4% ($19.1 million) for the three
months ended March 31, 1998, from 9.2% ($22.3 million) for the same period in
the prior year. This decrease in income from operations as a percentage of net
sales reflected the impact of price concessions made to several contractual
metal food can customers in exchange for contract term extensions with such
customers, the acquisition in April 1997 of the aluminum roll-on closure
business which operates at lower average margins and higher depreciation expense
incurred as a result of increased capital expenditures.
Income from operations as a percentage of net sales for the plastic container
business improved 1.4 percentage points to 13.3% ($10.0 million) for the three
months ended March 31, 1998, as compared to 11.9% ($6.8 million) for the same
period in 1997. The improved operating performance of the plastic container
business was attributable to increased production and sales volume resulting in
lower per unit manufacturing costs and continuing manufacturing efficiencies
realized from capital investment.
Interest Expense. Interest expense declined $2.0 million to $18.0 million for
the three months ended March 31, 1998 principally as a result of benefits
realized from the refinancing of substantially all of the Company's indebtedness
in the second and third quarters of 1997 with lower cost indebtedness, offset in
part by additional indebtedness incurred under the Company's U.S. Credit
Agreement to finance its recently completed acquisitions. Including the effect
of the exchange of the Preferred Stock for 13 1/4% Debentures in June 1997,
interest expense and preferred stock dividend requirements declined $3.7 million
during the first quarter of 1998 as compared to the first quarter of 1997.
Income Taxes. The provision for income taxes for the three months ended March
31, 1998 was recorded at an effective tax rate of 37.7% ($4.0 million), which
represents the Company's estimated annual effective tax rate for 1998.
During the first quarter of 1997, the Company determined that a portion of the
future tax benefits arising from its net operating loss carryforward would be
realized due to the Company's continued improvement in earnings and increased
probability of future taxable income. In accordance with SFAS No. 109, the
Company reduced its valuation allowance and recognized an income tax benefit.
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Net Income and Earnings per Share. As a result of the items discussed above, net
income for the three months ended March 31, 1998 was $6.7 million, a decrease of
$4.3 million from net income of $11.0 million (before the extraordinary charge
of $0.7 million and the preferred stock dividend requirement of $1.8 million)
for the three months ended March 31, 1997.
Earnings per diluted share for the first quarter of 1998 were $0.33 as compared
with $0.46 for the same period in 1997. The Company estimates that earnings per
diluted share for the three months ended March 31, 1998 would have been $0.06
greater than earnings per diluted share, before the preferred stock dividend
requirement, of $0.27 for the same period in the prior year if unusual items for
the non-cash stock option charge and the extraordinary charge incurred in
connection with the refinancing of the Company's 13 1/4% Senior Discount
Debentures due 2002 ("Discount Debentures") had been excluded from earnings and
if earnings for the three months ended March 31, 1997 had been calculated
utilizing the effective tax rate and the weighted average diluted shares
outstanding for the three months ended March 31, 1998.
During the first quarter of 1997, the Company incurred an extraordinary charge
of $0.7 million, net of taxes, or $0.04 per diluted share, for the write-off of
unamortized debt cost associated with the redemption of its remaining Discount
Debentures.
CAPITAL RESOURCES AND LIQUIDITY
The Company's liquidity requirements arise primarily from its obligations under
the indebtedness incurred in connection with its acquisitions and the
refinancing of such indebtedness, capital investment in new and existing
equipment and the funding of the Company's seasonal working capital needs.
Historically, the Company has met these liquidity requirements through cash flow
generated from operating activities and revolving loan borrowings.
For the first three months of 1998, net borrowings of revolving loans of $58.7
million under the Company's U.S. Credit Agreement, $4.2 million of borrowings
under the Company's Canadian credit facility and a decrease in cash balances of
$49.7 million were used to fund cash used by operations of $62.6 million for the
Company's seasonal working capital needs, capital expenditures of $17.5 million,
the acquisition of Winn in January 1998 for $14.1 million, and the repayment of
$18.4 million of bank term loans.
Because the Company sells metal containers used in fruit and vegetable pack
processing, its sales are seasonal. As is common in the industry, the Company
must access working capital to build inventory and then carry accounts
receivable for some customers beyond the end of the summer and fall packing
season. Seasonal accounts are generally settled by year end. Due to the
Company's seasonal requirements, the Company expects to incur short term
indebtedness to finance its working capital requirements.
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During 1998, the Company estimates that approximately $150.0 million of its
revolving loan facilities under its credit agreements will be utilized at its
peak in the third quarter of 1998 for seasonal working capital needs. Amounts
available under the Company's revolving loan facilities in excess of such
seasonal working capital needs are available to the Company to pursue its growth
strategy and for other permitted purposes. The Company financed the acquisition
of Winn in January 1998 through its revolving loan facility under its U.S.
Credit Agreement, and intends to finance the acquisition of Campbell's can
manufacturing assets through its revolving loan facility under its U.S. Credit
Agreement.
As of March 31, 1998, the Company had $58.7 million of revolving loans
outstanding, of which $44.6 million related to seasonal working capital needs
and $14.1 million related to long-term financing of acquisitions. The amount
used for acquisition financing has been recorded as long-term debt. The unused
portion of revolving loan commitments under the Company's credit agreements at
March 31, 1998, after taking into account outstanding letters of credit, was
$482.9 million.
Management believes that cash generated by operations and funds from revolving
loan borrowings under the Company's credit agreements will be sufficient to meet
the Company's expected operating needs, planned capital expenditures, debt
service and tax obligations for the foreseeable future.
The Company is continually evaluating and intends to continue to pursue
acquisition opportunities in the North American consumer goods packaging market.
The Company intends to borrow additional revolving loans under its U.S. Credit
Agreement to finance such acquisitions and to fund any resulting increased
operating needs. However, the Company may need to incur additional new
indebtedness to finance such acquisitions and to fund any resulting increased
operating needs. Any such new financing will have to be effected in compliance
with the agreements governing the Company's indebtedness. There can be no
assurance that the Company will be able to complete any such acquisition or
obtain any such new financing.
The Company is in compliance with all financial and operating covenants
contained in the instruments and agreements governing its indebtedness and
believes that it will continue to be in compliance with all such covenants
during 1998.
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Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
27 Financial Data Schedule.
(b) Reports on Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report to be signed on its behalf by
the undersigned thereunto duly authorized.
SILGAN HOLDINGS INC.
Dated: May 12, 1998 /s/Harley Rankin, Jr.
- -------------------- ---------------------
Harley Rankin, Jr.
Executive Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)
Dated: May 12, 1998 /s/Harold J. Rodriguez, Jr.
- -------------------- ---------------------------
Harold J. Rodriguez, Jr.
Vice President and Controller
(Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Silgan
Holdings Inc. Form 10-Q for the three months ended March 31, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
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<S> <C>
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<PERIOD-END> MAR-31-1998
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0
0
<COMMON> 189
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<EPS-PRIMARY> 0.35
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</TABLE>
