Company Overview - AptarGroup is a global supplier of innovative dispensing, sealing, and active packaging solutions for various markets including beauty, personal care, home care, prescription drugs, consumer health care, injectables, food, and beverages [12] - The company manufactures products such as dispensing pumps, closures, aerosol valves, and elastomeric primary packaging components, with facilities located in North America, Europe, Asia, and South America [12] Investment Analysis - AptarGroup currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of B, indicating a solid position in the market [13] - The company is projected to experience year-over-year earnings growth of 4.3% for the current fiscal year, supported by upward revisions in earnings estimates from three analysts in the last 60 days [13] - The Zacks Consensus Estimate for AptarGroup's earnings has increased by $0.01 to $5.88 per share, with an average earnings surprise of +8.3% [13][14]

Financial Performance - Net sales for Q2 2025 reached $966.0 million, a 6% increase from $910.1 million in Q2 2024, with core sales growth of 3%[158] - Operating income increased by approximately $18.4 million to $144.4 million in Q2 2025, representing 15.0% of net sales, up from 13.8% in the prior year[175] - Net income attributable to AptarGroup, Inc. was $111.7 million for Q2 2025, compared to $90.5 million in Q2 2024, reflecting a significant year-over-year increase[186] - Reported net sales for the first six months of 2025 increased 2% to $1.85 billion compared to $1.83 billion in the same period of 2024, with core sales also up by 2%[158] - Reported net sales for Q2 2025 were $966.0 million, compared to $910.1 million in Q2 2024, reflecting a sales growth driven by operational improvements[224] - Reported net income for Q2 2025 was $111.7 million, an increase from $90.5 million in Q2 2024, resulting in a reported net income margin of 11.6%[224] - Reported net income for the first half of 2025 was $190.4 million, compared to $173.4 million in 2024, reflecting a year-over-year increase of 9.8%[230] Cost and Expenses - Cost of sales as a percentage of net sales decreased to 62.0% in Q2 2025 from 62.4% in Q2 2024, driven by a better mix of higher-margin Pharma product sales[163] - Selling, general and administrative expenses (SG&A) increased to $151.1 million in Q2 2025, but as a percentage of net sales, it decreased to 15.6% from 16.4% in Q2 2024[166] - Depreciation and amortization expenses rose to $69.9 million in Q2 2025, up from $65.0 million in Q2 2024, reflecting higher capital investments[169] - Interest expense increased to $10.9 million in Q2 2025 from $10.1 million in Q2 2024, due to refinancing of debt with higher interest rates[178] - Restructuring costs for Q2 2025 were $1.6 million, down from $2.3 million in Q2 2024, as the company continues to optimize its cost structure[172] Segment Performance - Net sales for the Aptar Pharma segment increased by 7% to $442.6 million in Q2 2025, with core sales growth of 3% after accounting for a 4% positive currency effect[189] - The Aptar Beauty segment reported a 4% increase in net sales to $334.8 million in Q2 2025, with core sales growth of 1%[197] - The Aptar Closures segment saw a reported net sales increase of approximately 8% to $188.6 million in Q2 2025, with core sales growth of 7%[205] - Core sales in the consumer health care market declined by 14% in Q2 2025, primarily due to lower volumes in nasal decongestants and cough and cold products[190] - Core sales of active material science solutions increased by 11% in Q2 2025, driven by strong demand for active film sales[189] Adjusted EBITDA - Adjusted EBITDA for Q2 2025 rose by 11% to $156.8 million, resulting in an Adjusted EBITDA margin improvement to 35.4% from 34.1% in Q2 2024[193] - Adjusted EBITDA for the consolidated segment in Q2 2025 was $218.4 million, with an Adjusted EBITDA margin of 22.6%[224] - Adjusted EBITDA for the Aptar Beauty segment in Q2 2025 increased by 5% to $47.1 million, leading to an Adjusted EBITDA margin of 14.1%[201] - Adjusted EBITDA for the Aptar Closures segment in Q2 2025 increased by 17% to $31.9 million, resulting in an Adjusted EBITDA margin of 16.9%[205] - Adjusted EBITDA for the first six months of 2025 rose by 9% to $59.1 million compared to $54.3 million in the same period of 2024, with the Adjusted EBITDA margin improving from 15.3% to 16.4%[211] Cash Flow and Capital Expenditures - Free cash flow was calculated as cash provided by operating activities less capital expenditures, highlighting the company's ability to generate cash for dividends and acquisitions[222] - Capital expenditures for the first half of 2025 were $120.3 million, compared to $143.9 million in 2024, reflecting a reduction of 16.4%[231] - The company reported a net debt of $10.9 million, indicating a strong financial leverage position[221] - Net cash provided by operations for the first six months of 2025 was $208.7 million, a decrease from $235.9 million in the same period of 2024[241] Debt and Financing - Net debt increased to $916.8 million as of June 30, 2025, from $800.2 million at December 31, 2024, resulting in a net debt to net capital ratio of 25.2%[240] - The consolidated leverage ratio was 1.19 to 1.00 as of June 30, 2025, well below the maximum requirement of 3.50 to 1.00, allowing for approximately $1.9 billion in additional borrowing[247][248] - The company has a revolving credit facility providing unsecured financing of up to $600 million, with a maturity date extended to July 2029[245] - The company utilized $141.1 million under the Term Loan facility as of June 30, 2025, which matures in July 2027[247] Foreign Exchange and Hedging - The company experienced a weaker U.S. dollar compared to most currencies, which had a positive translation effect on financial results during the second quarter of 2025[234] - The company plans to manage foreign exchange exposure primarily through forward exchange contracts to hedge recorded transactions[233] - As of June 30, 2025, the fair value of foreign currency forward exchange contracts was recorded at $0.9 million in prepaid and other assets and $0.9 million in accounts payable[265] - A seven-year USD/EUR fixed-to-fixed cross currency interest rate swap was entered into to hedge interest rate exposure relating to $203 million of fixed-rate USD debt[265] Dividends and Future Outlook - The Board of Directors declared a quarterly cash dividend of $0.45 per share, payable on August 14, 2025, to stockholders of record as of July 24, 2025[249] - Earnings per share for Q3 2025 are expected to be in the range of $1.53 to $1.61, based on an effective tax rate range of 20.5% to 22.5%[258] - Total estimated cash outlays for capital expenditures in 2025 are expected to be approximately $270 million to $290 million[258]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $1.66, an increase of 18% compared to the prior year quarter [4] - Reported sales increased by 6%, with core sales growing by 3% year-over-year [15] - Adjusted EBITDA was $218 million, reflecting a 13% increase from the previous year [15] - The effective tax rate for the second quarter was 20%, down from 23.5% in the prior year [16] Business Segment Performance - The Pharma segment's core sales increased by 3%, with prescription sales up 8% and injectables up 9% [18] - Consumer Healthcare core sales decreased by 14% due to inventory management issues in Europe [18] - The Beauty segment saw core sales increase by 1%, driven by stronger tooling sales, while fragrance and skincare sales decreased by 4% [20] - The Closures segment's core sales increased by 7%, with food sales up 13% and beverage sales up 7% [22] Market Data and Key Metrics Changes - North America experienced solid growth in Consumer Healthcare, while Europe struggled with excess inventory from a weaker cold and flu season [6] - The company noted that the visibility into future European demand for cold and cough medications has not improved significantly [7] - The Prestige Beauty market faced headwinds from trade uncertainties, impacting demand recovery [10] Company Strategy and Industry Competition - The acquisition of Mod3 Pharma's clinical trial manufacturing capabilities is expected to enhance the company's position in the Pharma sector [8] - The company aims to expand its services into dermal, ophthalmic, injectable, and packaging solutions [9] - Cost management remains a priority across all segments, with ongoing initiatives to enhance earnings per share [34] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the resilience and adaptability of the teams despite a complex macroeconomic backdrop [28] - The company anticipates challenges in the cough and cold markets in Europe and expects ongoing legal expenses related to intellectual property rights [30][32] - The management remains optimistic about the Pharma pipeline and the potential for systemic nasal drug delivery as a growth platform [31] Other Important Information - The company repurchased approximately 1 million shares for about $150 million in the first half of the year [14] - The company was recognized as one of Time Magazine's World Most Sustainable Companies for the second consecutive year [11] Q&A Session Summary Question: Can you provide more details on naloxone sales normalizing and its impact on core sales growth? - Management indicated that naloxone sales are expected to grow more mutedly in the coming quarters due to uncertainty and inventory issues [38] Question: What caused the significant inventory buildup in Consumer Healthcare? - Management explained that post-COVID demand spikes led to over-ordering, resulting in excess inventory that is now being worked off [52] Question: Can you elaborate on the legal expenditures related to intellectual property rights? - Management confirmed ongoing litigation to protect intellectual property, with expected legal costs of approximately $5 million to $6 million per quarter [82] Question: How is the acquisition in New Jersey expected to impact the business? - The acquisition is aimed at enhancing early-stage development capabilities, not for large-scale contract manufacturing [90] Question: What is the outlook for the Prestige Beauty market? - Management noted that while there are uncertainties, recent trade agreements may provide clarity for European clients, potentially boosting sales in the future [66]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $1.66, an increase of 18% compared to the prior year quarter [4][16] - Reported sales increased by 6%, with core sales growing by 3% year-over-year [15][22] - Adjusted EBITDA was $218 million, reflecting a 13% increase from the previous year [15] Business Line Data and Key Metrics Changes - Pharma segment core sales increased by 3%, with prescription sales up 8% and injectables up 9% [17][18] - Consumer Healthcare core sales decreased by 14% due to inventory management issues in Europe [17] - Beauty segment core sales increased by 1%, driven by stronger tooling sales, while fragrance and skincare saw a 4% decline [19] - Closures segment core sales increased by 7%, with food sales up 13% [20][21] Market Data and Key Metrics Changes - North America saw growth in Consumer Healthcare, while Europe struggled with excess inventory from a weaker cold and flu season [6][17] - The beverage market remained strong, with no significant issues reported despite competitor challenges [74] Company Strategy and Development Direction - The company announced the acquisition of Mod3 Pharma's clinical trial manufacturing capabilities, expanding its services in the Pharma sector [7] - Focus on innovation in drug delivery systems and expansion into new markets, including systemic nasal drug delivery [30] - Continued emphasis on cost management and operational efficiencies across all segments [22][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the Pharma segment, despite challenges in the Consumer Healthcare division [27][30] - Anticipated continued growth in the Injectables market and a strong pipeline of new products [28][30] - Legal expenses related to intellectual property rights are expected to increase, impacting short-term profitability [25][84] Other Important Information - The company repurchased approximately 1 million shares for about $150 million in the first half of the year [14] - Recognized as one of Time Magazine's World Most Sustainable Companies for the second consecutive year [11] Q&A Session Summary Question: Can you provide more details on naloxone sales normalizing? - Management indicated that naloxone sales are expected to grow more slowly due to uncertainty in nontraditional distribution channels and recent federal guidance affecting funding [38][40] Question: What caused the extended downturn in Consumer Healthcare? - Management explained that post-COVID demand spikes led to inventory buildup, which is now being worked off, contributing to the downturn [54] Question: Can you elaborate on the legal expenditures related to intellectual property? - Management confirmed ongoing litigation to protect intellectual property rights, which is expected to continue for several quarters [61][84] Question: What is the outlook for the Beauty segment? - Management noted that while the Prestige Beauty market has faced challenges, recent tariff clarity may improve conditions moving forward [68][70]

Financial Performance - Q2 2025 reported sales grew by 6% to $966 million[7, 14], with core sales growth of 3%[7, 14] - Q2 2025 reported earnings per share (EPS) increased by 25% to $167[7, 16] - Q2 2025 adjusted EPS grew by 18% to $166[7, 19] - Q2 2025 adjusted EBITDA increased by 13% to $218 million[21] - Year-to-date 2025 reported sales increased by 2% to $1853 million[33], with core sales growth of 2%[33] - Year-to-date 2025 reported EPS increased by 10% to $283[35] - Year-to-date 2025 adjusted EBITDA increased by 8% to $402 million[41] Segment Performance - Aptar Pharma's Q2 2025 sales increased by 7% to $443 million[24], with a 130 basis point improvement in adjusted EBITDA margin to 354%[24] - Aptar Beauty's Q2 2025 sales increased by 4% to $335 million[27], with a 20 basis point improvement in adjusted EBITDA margin to 141%[27] - Aptar Closures' Q2 2025 sales increased by 8% to $189 million[30], with a 130 basis point improvement in adjusted EBITDA margin to 169%[30] Outlook - The company expects Q3 2025 adjusted EPS to be between $153 and $161[44]

Core Insights - AptarGroup (ATR) reported quarterly earnings of $1.66 per share, exceeding the Zacks Consensus Estimate of $1.58 per share, and up from $1.37 per share a year ago, representing an earnings surprise of +5.06% [1] - The company achieved revenues of $966.01 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.10% and increasing from $910.06 million year-over-year [2] - The stock has underperformed the market, losing about 0.2% since the beginning of the year compared to the S&P 500's gain of 8.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.62 on revenues of $948.99 million, and for the current fiscal year, it is $5.88 on revenues of $3.69 billion [7] - The estimate revisions trend for AptarGroup was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Containers - Paper and Packaging industry, to which AptarGroup belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Executive Summary & Highlights](index=1&type=section&id=1_Executive_Summary_Highlights) AptarGroup delivered strong financial results for both Q2 and year-to-date 2025, marked by sales growth, increased profitability, and significant shareholder returns [Second Quarter 2025 Highlights](index=1&type=section&id=1.1_Second_Quarter_2025_Highlights) AptarGroup reported strong second quarter 2025 results with positive contributions from all segments, particularly Pharma and Closures, driven by increased volumes and sales of higher value products. The company also returned $100 million to shareholders through dividends and share repurchases Second Quarter 2025 Key Financial Highlights | Metric | Value | Change (YoY) | | :-------------------------- | :---------- | :----------- | | Reported Sales Growth | 6% | +6% | | Core Sales Growth | 3% | +3% | | Reported Net Income | $112 million | +24% | | Adjusted EBITDA | $218 million | +13% | | Adjusted EBITDA Margin | 22.6% | +140 bps | | Reported Earnings Per Share | $1.67 | +25% | | Adjusted Earnings Per Share | $1.66 | +18% | | Shareholder Returns | $100 million | N/A | [Six Months Year-to-Date 2025 Highlights](index=1&type=section&id=1.2_Six_Months_Year_to_Date_2025_Highlights) For the first half of 2025, AptarGroup achieved reported and core sales growth of 2%, with significant increases in net income and adjusted EBITDA, and returned a total of $210 million to shareholders Six Months Year-to-Date 2025 Key Financial Highlights | Metric | Value | Change (YoY) | | :-------------------------- | :---------- | :----------- | | Reported Sales Growth | 2% | +2% | | Core Sales Growth | 2% | +2% | | Reported Net Income | $191 million | +10% | | Adjusted EBITDA | $402 million | +8% | | Reported Earnings Per Share | $2.83 | +10% | | Adjusted Earnings Per Share | $2.86 | +8% | | Shareholder Returns | $210 million | N/A | [Second Quarter 2025 Financial Results](index=1&type=section&id=2_Second_Quarter_2025_Financial_Results) AptarGroup's second quarter 2025 financial results show consolidated sales growth and strong performance across all segments, particularly Pharma and Closures [Consolidated Performance](index=1&type=section&id=2.1_Consolidated_Performance_Q2) AptarGroup's consolidated sales for Q2 2025 increased 6% to $966 million compared to the prior year, with core sales increasing 3%, demonstrating overall growth despite currency effects Second Quarter 2025 Consolidated Sales Analysis | Metric | Q2 2025 Sales | Q2 2024 Sales | Reported Sales Growth | Currency Effects | Acquisitions | Core Sales Growth | | :---------------- | :------------ | :------------ | :-------------------- | :--------------- | :----------- | :---------------- | | Total AptarGroup | $966 million | $910 million | 6% | (3)% | 0% | 3% | [Segment Performance](index=2&type=section&id=2.2_Segment_Performance_Q2) All Aptar segments contributed positively to Q2 2025 results, with Pharma and Closures driving growth through increased volumes and higher-value products, while Beauty saw modest core sales growth despite mixed market conditions [Aptar Pharma](index=2&type=section&id=2.2.1_Aptar_Pharma) Aptar Pharma achieved strong Q2 2025 sales and margin growth, driven by Prescription, Injectables, and Active Material Science - Reported sales increased **7%** and core sales increased **3%** in Q2 2025[7](index=7&type=chunk) - Growth was driven by strong demand in Prescription, Injectables (**9% core sales growth**), and Active Material Science (**11% core sales growth**), offsetting a decline in Consumer Healthcare[7](index=7&type=chunk) - Adjusted EBITDA margins grew **130 basis points to 35.4%**, aided by royalty revenues[7](index=7&type=chunk) [Aptar Beauty](index=2&type=section&id=2.2.2_Aptar_Beauty) Aptar Beauty reported modest core sales growth in Q2 2025, supported by personal care, despite challenges in beauty dispensing technologies - Reported sales increased **4%** and core sales were up **1%** in Q2 2025, primarily due to higher tooling sales for personal care and beauty end markets[8](index=8&type=chunk) - Strong growth in personal care products partially offset lower demand in beauty dispensing technologies for fragrance and full pack solutions, impacted by subdued new fragrance launches and tariff-related uncertainties[8](index=8&type=chunk) - Adjusted EBITDA margins increased by **20 basis points to 14.1%**[8](index=8&type=chunk) [Aptar Closures](index=2&type=section&id=2.2.3_Aptar_Closures) Aptar Closures delivered strong Q2 2025 sales and margin improvements, fueled by increased demand in food and beverage markets - Reported sales increased **8%** and core sales increased **7%** in Q2 2025[9](index=9&type=chunk) - Solid product sales growth was mainly driven by increased demand in the food and beverage end markets across almost every region and various applications[9](index=9&type=chunk) - Adjusted EBITDA margins improved by **130 basis points to 16.9%**[9](index=9&type=chunk) [Earnings Per Share and Tax Rate](index=2&type=section&id=2.3_Earnings_Per_Share_Tax_Rate_Q2) Aptar's Q2 2025 reported earnings per share increased 25% to $1.67, and adjusted earnings per share increased 18% to $1.66, benefiting from a lower effective tax rate of 20.0% due to tax planning and greater tax benefits from share-based compensation Second Quarter Earnings Per Share and Tax Rate | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Reported Earnings Per Share | $1.67 | $1.34 | +25% | | Adjusted Earnings Per Share | $1.66 | $1.41 | +18% | | Effective Tax Rate | 20.0% | 23.5% | -3.5 percentage points | [Six Months Year-to-Date 2025 Financial Results](index=2&type=section&id=3_Six_Months_Year_to_Date_2025_Financial_Results) AptarGroup's year-to-date 2025 financial results show consistent consolidated sales growth and increased profitability for the first half of the year [Consolidated Performance](index=2&type=section&id=3.1_Consolidated_Performance_YTD) For the six months ended June 30, 2025, AptarGroup's reported sales increased 2% to $1.85 billion, with core sales also up 2%, reflecting consistent growth across the company Six Months Year-to-Date 2025 Consolidated Sales Analysis | Metric | YTD 2025 Sales | YTD 2024 Sales | Reported Sales Growth | Currency Effects | Acquisitions | Core Sales Growth | | :---------------- | :------------- | :------------- | :-------------------- | :--------------- | :----------- | :---------------- | | Total AptarGroup | $1.85 billion | $1.83 billion | 2% | 0% | 0% | 2% | [Earnings Per Share and Tax Rate](index=2&type=section&id=3.2_Earnings_Per_Share_Tax_Rate_YTD) Aptar's year-to-date reported earnings per share increased 10% to $2.83, and adjusted earnings per share rose 8% to $2.86, with the effective tax rate for the period at 22.5% Six Months Year-to-Date Earnings Per Share and Tax Rate | Metric | YTD 2025 | YTD 2024 | Change (YoY) | | :-------------------------- | :------- | :------- | :----------- | | Reported Earnings Per Share | $2.83 | $2.57 | +10% | | Adjusted Earnings Per Share | $2.86 | $2.64 | +8% | | Effective Tax Rate | 22.5% | 22.1% | +0.4 percentage points | [Outlook and Shareholder Returns](index=3&type=section&id=4_Outlook_Shareholder_Returns) Aptar anticipates solid third-quarter 2025 performance, particularly in Pharma, while continuing to return capital to shareholders through dividends and share repurchases [Third Quarter 2025 Outlook](index=3&type=section&id=4.1_Third_Quarter_2025_Outlook) Aptar anticipates a solid Q3 2025, with continued strength in Pharma, particularly Injectables, driven by rising demand for higher value elastomeric components. The company expects adjusted earnings per share in the range of $1.53 to $1.61, factoring in higher legal fees and a lower effective tax rate - Expected adjusted earnings per share for Q3 2025: **$1.53 to $1.61**[14](index=14&type=chunk) - Guidance includes approximately **6 to 7 cents of higher legal fees** associated with litigating pharma intellectual property rights[14](index=14&type=chunk) - Expected effective tax rate range for Q3 2025: **20.5% to 22.5%**, primarily due to a one-time tax benefit, compared to 23.8% in Q3 2024[14](index=14&type=chunk) - Anticipates continued strength in Pharma, especially Injectables, driven by growth in biologics, GLP-1 therapies, and Annex 1 compliance requirements[14](index=14&type=chunk) - Expects challenges as naloxone sales begin to normalize and elevated cough and cold inventory in Europe persists[14](index=14&type=chunk) - Modest Q3 contributions are anticipated from Closures and Beauty segments, with a continued focus on cost discipline across all segments[14](index=14&type=chunk) [Cash Dividends and Share Repurchases](index=3&type=section&id=4.2_Cash_Dividends_Share_Repurchases) Aptar's Board of Directors approved a quarterly cash dividend of $0.45 per share. In the second quarter, the company repurchased 452 thousand shares for $70 million, contributing to a total of $210 million returned to shareholders in the first half of the year - Quarterly cash dividend approved: **$0.45 per share**, payable August 14, 2025[15](index=15&type=chunk) - Q2 2025 share repurchases: **452 thousand shares for $70 million**[15](index=15&type=chunk) - Total returned to shareholders in the first half of 2025: **$210 million**[3](index=3&type=chunk)[6](index=6&type=chunk)[15](index=15&type=chunk) [Company Information and Disclosures](index=3&type=section&id=5_Company_Information_Disclosures) This section provides essential information about AptarGroup, including its business overview, conference call details, non-GAAP measure definitions, and forward-looking statement disclaimers [About Aptar](index=3&type=section&id=5.1_About_Aptar) Aptar is a global leader in drug and consumer product dosing, dispensing, and protection technologies, serving diverse end markets including pharmaceutical, beauty, food, and personal care. The company is headquartered in Crystal Lake, Illinois, with over 13,000 employees in 20 countries - Global leader in drug and consumer product dosing, dispensing, and protection technologies[17](index=17&type=chunk) - Serves pharmaceutical, beauty, food, beverage, personal care, and home care markets[17](index=17&type=chunk) - Headquartered in Crystal Lake, Illinois, with more than **13,000 dedicated employees in 20 countries**[17](index=17&type=chunk) [Open Conference Call](index=3&type=section&id=5.2_Open_Conference_Call) Aptar will host a conference call on Friday, August 1, 2025, at 8:00 a.m. Central Time to discuss the company's second quarter 2025 results. Interested parties can listen via live webcast or access a replay on the Investor Relations website - Conference call scheduled for **Friday, August 1, 2025, at 8:00 a.m. Central Time**[16](index=16&type=chunk) - Purpose: Discuss second quarter 2025 results[16](index=16&type=chunk) - Access: Live webcast and replay available on investors.aptar.com[16](index=16&type=chunk) [Presentation of Non-GAAP Information](index=4&type=section&id=5.3_Presentation_of_Non_GAAP_Information) This section defines non-GAAP financial measures used in the press release, such as adjusted earnings per share, adjusted EBITDA, and core sales. These measures exclude the impact of restructuring, acquisition costs, investment gains/losses, and foreign currency effects to provide a clearer period-over-period comparison of core operating performance for investors and management - Non-GAAP financial measures include adjusted earnings per share, adjusted EBITDA, adjusted EBITDA margin, and core sales[18](index=18&type=chunk) - These measures exclude items such as restructuring initiatives, acquisition-related costs, certain purchase accounting adjustments, net unrealized investment gains/losses, and foreign currency translation effects[18](index=18&type=chunk) - Rationale: Provide useful information for investors by allowing a better period-over-period comparison of operating results and reflecting core operating performance[18](index=18&type=chunk) - Free cash flow is calculated as cash provided by operating activities less capital expenditures plus proceeds from government grants related to capital expenditures[18](index=18&type=chunk) [Forward-Looking Statements](index=5&type=section&id=5.4_Forward_Looking_Statements) The press release contains forward-looking statements that are subject to various known and unknown risks and uncertainties, including geopolitical conflicts, cybersecurity threats, raw material availability, intellectual property litigation, economic conditions, competition, tariffs, and regulatory changes, which could cause actual results to differ materially from expectations - Forward-looking statements are based on beliefs and assumptions, and actual results may differ materially due to known or unknown risks and uncertainties[20](index=20&type=chunk) - Key risks include: geopolitical conflicts, cybersecurity threats, raw material and component availability, intellectual property rights litigation, economic conditions (inflation/recession), competition, tariffs, supply chain disruptions, foreign currency fluctuations, and changes in government regulation[20](index=20&type=chunk) - The company undertakes no obligation to update publicly any forward-looking statements, except as required by law[20](index=20&type=chunk) [Contacts](index=5&type=section&id=5.5_Contacts) Provides contact information for investor relations and media inquiries - Investor Relations Contact: Mary Skafidas, mary.skafidas@aptar.com, 815-479-5530[21](index=21&type=chunk) - Media Contact: Katie Reardon, katie.reardon@aptar.com, 815-479-5671[21](index=21&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=6_Condensed_Consolidated_Financial_Statements_Unaudited) This section presents AptarGroup's unaudited condensed consolidated financial statements, including statements of income and balance sheets, for the specified periods [Consolidated Statements of Income](index=6&type=section&id=6.1_Consolidated_Statements_of_Income) The unaudited condensed consolidated statements of income present AptarGroup's financial performance for the three and six months ended June 30, 2025 and 2024, showing increases in net sales, operating income, and net income for both periods Consolidated Statements of Income (Unaudited) | Metric (In Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | $966,009 | $910,063 | $1,853,314 | $1,825,511 | | Operating Income | $144,393 | $126,010 | $257,841 | $238,093 | | Income before Income Taxes | $139,714 | $118,246 | $245,729 | $222,564 | | Net Income | $111,732 | $90,458 | $190,395 | $173,391 | | Diluted EPS | $1.67 | $1.34 | $2.83 | $2.57 | [Consolidated Balance Sheets](index=7&type=section&id=6.2_Consolidated_Balance_Sheets) The unaudited consolidated balance sheets show AptarGroup's financial position as of June 30, 2025, compared to December 31, 2024, with total assets increasing to $4.87 billion and total stockholders' equity rising to $2.72 billion Consolidated Balance Sheets (Unaudited) | Metric (In Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :-------------- | :---------------- | | Total Current Assets | $1,663,020 | $1,478,383 | | Property, Plant and Equipment, Net | $1,584,533 | $1,447,150 | | Goodwill | $996,489 | $936,256 | | Total Assets | $4,865,381 | $4,432,278 | | Total Current Liabilities | $1,368,884 | $1,068,281 | | Total Liabilities | $2,147,567 | $1,946,354 | | Total Stockholders' Equity | $2,717,814 | $2,485,924 | [Non-GAAP Reconciliations (Unaudited)](index=8&type=section&id=7_Non_GAAP_Reconciliations_Unaudited) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including adjusted EBIT, EBITDA, and earnings per share, for transparent financial reporting [Reconciliation of Adjusted EBIT and Adjusted EBITDA to Net Income](index=8&type=section&id=7.1_Reconciliation_of_Adjusted_EBIT_and_Adjusted_EBITDA_to_Net_Income) This section provides detailed reconciliations of reported net income to adjusted EBIT and adjusted EBITDA for both the three and six months ended June 30, 2025 and 2024, highlighting adjustments for restructuring initiatives, net investment gains/losses, and transaction costs related to acquisitions [Three Months Ended June 30, 2025 & 2024](index=8&type=section&id=7.1.1_Three_Months_Ended_June_30_2025_2024) This sub-section details the reconciliation of adjusted EBIT and EBITDA to net income for the second quarter of 2025 and 2024 Adjusted EBIT and EBITDA Reconciliation (Q2) | Metric (In Thousands) | Q2 2025 (Consolidated) | Q2 2024 (Consolidated) | | :-------------------------------------------------- | :--------------------- | :--------------------- | | Reported income before income taxes | $139,714 | $118,246 | | Adjustments (Restructuring, Net investment, Transaction costs) | (179) | 2,595 | | Adjusted earnings before income taxes | $139,535 | $120,841 | | Adjusted EBIT | $148,505 | $127,800 | | Adjusted EBITDA | $218,409 | $192,768 | | Adjusted EBITDA margins | 22.6% | 21.2% | [Six Months Ended June 30, 2025 & 2024](index=9&type=section&id=7.1.2_Six_Months_Ended_June_30_2025_2024) This sub-section details the reconciliation of adjusted EBIT and EBITDA to net income for the six months ended June 30, 2025 and 2024 Adjusted EBIT and EBITDA Reconciliation (YTD) | Metric (In Thousands) | YTD 2025 (Consolidated) | YTD 2024 (Consolidated) | | :-------------------------------------------------- | :---------------------- | :---------------------- | | Reported income before income taxes | $245,729 | $222,564 | | Adjustments (Restructuring, Net investment, Transaction costs) | 2,959 | 5,483 | | Adjusted earnings before income taxes | $248,688 | $228,047 | | Adjusted EBIT | $266,195 | $242,283 | | Adjusted EBITDA | $401,746 | $371,600 | | Adjusted EBITDA margins | 21.7% | 20.4% | [Reconciliation of Adjusted Earnings Per Diluted Share (Q2 & YTD)](index=10&type=section&id=7.2_Reconciliation_of_Adjusted_Earnings_Per_Diluted_Share_Q2_YTD) This reconciliation details the adjustments made to reported diluted earnings per share to arrive at adjusted diluted earnings per share for the three and six months ended June 30, 2025 and 2024, accounting for restructuring, net investment gains/losses, acquisition costs, and foreign currency effects Adjusted Earnings Per Diluted Share Reconciliation | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------------------- | :------ | :------ | :------- | :------- | | Reported Net Income Attributable to AptarGroup, Inc. Per Diluted Share | $1.67 | $1.34 | $2.83 | $2.57 | | Adjustments (Restructuring, Net investment, Transaction costs, FX) | (0.01) | 0.07 | 0.03 | 0.07 | | Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share | $1.66 | $1.41 | $2.86 | $2.64 | [Reconciliation of Free Cash Flow to Net Cash Provided by Operations](index=11&type=section&id=7.3_Reconciliation_of_Free_Cash_Flow_to_Net_Cash_Provided_by_Operations) This reconciliation shows AptarGroup's free cash flow for the three and six months ended June 30, 2025 and 2024, derived from net cash provided by operations after accounting for capital expenditures and proceeds from government grants Free Cash Flow Reconciliation (In Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operations | $125,958 | $143,579 | $208,700 | $235,912 | | Capital Expenditures | (63,425) | (68,205) | (120,287) | (143,866) | | Proceeds from Government Grants | 3,308 | — | 3,308 | — | | Free Cash Flow | $65,841 | $75,374 | $91,721 | $92,046 | [Reconciliation of Adjusted Earnings Per Diluted Share (Q3 2025 Outlook)](index=12&type=section&id=7.4_Reconciliation_of_Adjusted_Earnings_Per_Diluted_Share_Q3_2025_Outlook) This reconciliation provides the basis for Aptar's third quarter 2025 adjusted earnings per diluted share guidance of $1.53 to $1.61, detailing adjustments to the prior year's reported earnings for restructuring, investment gains, and foreign currency effects, and noting the expected effective tax rate range Adjusted Earnings Per Diluted Share Reconciliation (Q3 Outlook) | Metric | Expected Q3 2025 (Adjusted) | Q3 2024 (Adjusted) | | :-------------------------------------------------- | :-------------------------- | :----------------- | | Adjusted Net Income Attributable to AptarGroup, Inc. | $104,192 | $104,192 | | Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share | $1.53 - $1.61 | $1.54 | - The expected earnings per share range for Q3 2025 is based on an effective tax rate range of **20.5% to 22.5%**, compared to the prior year's effective tax rate of 23.8%[34](index=34&type=chunk)

Company Overview - AptarGroup, Inc. (NYSE: ATR) designs and manufactures a wide variety of drug delivery and consumer product dispensing solutions for various end markets [1] - The company operates through three reportable segments: Pharma, Beauty, and Closures [1] - AptarGroup has a current market capitalization, indicating its size and market presence [1] Analyst Background - The analyst has a master's degree in Analytics from Northwestern University and a bachelor's degree in Accounting [1] - With over 10 years of experience in the investment arena, the analyst has progressed from an analyst role to a management position [1] - Dividend investing is a personal interest of the analyst, who aims to share insights with the Seeking Alpha community [1]

Industry Overview - The Zacks Containers - Paper and Packaging industry is experiencing weak demand due to lower consumer spending amid inflation, but pricing actions by industry players are expected to mitigate the impacts of supply-chain disruptions and elevated costs [1][4] - The industry is supported by rising e-commerce activities and increasing demand for sustainable packaging options due to environmental concerns [1][5] Market Dynamics - The industry has faced volume declines as consumers reduce spending and inventory levels, impacting top-line performance [4] - Supply-chain disruptions and higher costs for materials, labor, and transportation, along with tariffs, are adding pressure on margins [4] - Companies are implementing pricing strategies and cost-reduction actions to counter these challenges [4] Growth Opportunities - E-commerce is a significant growth catalyst, with global e-commerce revenues projected to grow at a CAGR of 18.9% from 2024 to 2030, and the U.S. market at 16.4% [5] - The industry has over 60% exposure to consumer-oriented markets, ensuring stable demand for packaging solutions across economic cycles [5] Environmental Trends - There is a growing preference for eco-friendly biodegradable packaging materials, driven by increased consumer awareness of environmental issues [6] - The industry is adopting new technologies and incorporating recycled content into production methods to enhance sustainability [6] Industry Performance - The Zacks Containers - Paper and Packaging industry ranks 155 out of 247 Zacks industries, placing it in the bottom 37% [7][8] - The industry has underperformed compared to its sector and the S&P 500, declining 9.7% over the past year, while the sector grew by 10.7% and the S&P 500 gained 16.1% [10] Current Valuation - The industry is currently trading at a trailing 12-month EV/EBITDA ratio of 20.84, higher than the S&P 500's 18.07 and the Industrial Products sector's 19.71 [13] - Over the past five years, the industry has traded between 17.53X and 28.12X, with a median of 21.29X [18] Company Highlights - **Greif (GEF)**: Aims for adjusted EBITDA of $1 billion by fiscal 2027, with a focus on higher-margin offerings and cost elimination initiatives [19][20] - **Brambles (BXBLY)**: Reported a 3% revenue growth to $4.9 billion in the first nine months of fiscal 2025, with expectations of 4-5% growth for the fiscal year [23][24] - **AptarGroup (ATR)**: Sees healthy demand in its Pharma segment and aims to expand through acquisitions, with a focus on resilient markets [27][28]

Industry Overview - The U.S. manufacturing sector is showing signs of recovery after a prolonged downturn, with new orders for manufactured goods increasing by 8.2% in May compared to a revised 3.9% decline in April, and a year-over-year increase of 3.2% [3][4] - The rebound in manufacturing activity is supported by easing inflationary pressures and expectations of Federal Reserve rate cuts, which are anticipated to boost demand [1][6][11] Manufacturing Activity - The Institute of Supply Management's manufacturing PMI rose to 49 in June from 48.5 in May, indicating a continued contraction but a rebound from a six-month low [5][6] - Manufacturing activity accounts for 10.2% of the U.S. economy, highlighting its significance [5] Stock Recommendations - Four stocks from the manufacturing sector are recommended for investment: Allegion plc (ALLE), AptarGroup, Inc. (ATR), Broadwind, Inc. (BWEN), and DXP Enterprises, Inc. (DXPE), all of which have strong earnings growth prospects and Zacks Rank of 1 (Strong Buy) or 2 (Buy) [2][11] Allegion plc (ALLE) - Allegion is a global provider of security products and solutions, with an expected earnings growth of 3.9% for the current year and a Zacks Rank 2 [8][9] AptarGroup, Inc. (ATR) - AptarGroup specializes in innovative dispensing and packaging solutions, with an expected earnings growth of 4.1% for the current year and a Zacks Rank 2 [12][13] Broadwind, Inc. (BWEN) - Broadwind is a precision manufacturer focused on clean tech, particularly in the U.S. wind energy sector, with an expected earnings growth of 60% for the current year and a Zacks Rank 2 [14][15] DXP Enterprises, Inc. (DXPE) - DXP Enterprises is a distributor providing innovative solutions to industrial customers, with an expected earnings growth rate of 17.5% for the current year and a Zacks Rank 2 [16][17]