STAMFORD, Conn.--(BUSINESS WIRE)--Jun. 4, 2019--
Silgan Holdings Inc. (Nasdaq:SLGN) announced today that it is closing
its metal container manufacturing facilities in Mt. Vernon, Missouri and
Waupun, Wisconsin. The Company anticipates closing both of these
facilities during the fourth quarter of 2019. These plant closings, in
conjunction with the ratification last month of a new labor agreement at
the Company’s Menomonee Falls, Wisconsin metal container manufacturing
facility that provides for the Company’s withdrawal from the Central
States Pension Fund for that facility, will result in the Company’s
complete withdrawal from the Central States Pension Fund. Volumes from
the closed facilities will be absorbed in existing facilities and in a
new plant to be leased in the Midwest of the United States.
“Decisions regarding footprint optimization plans are always difficult,
and we want to thank our dedicated employees at both facilities for
their long service and their anticipated efforts during this transition.
At Silgan, these decisions are driven by a relentless pursuit to lower
our overall cost structure, improve operating efficiencies and enhance
our leading competitive position in our metal container business,” said
Adam Greenlee, President of Silgan. “Separately, we believe that
withdrawing from the Central States Pension Fund and providing our
Menomonee Falls employees with a company sponsored benefit plan is a
better long-term solution,” concluded Mr. Greenlee.
The Company expects to recognize estimated pre-tax rationalization
charges related to the plant closings, excluding charges related to the
withdrawal from the Central States Pension Fund, of approximately $5.2
million in 2019, approximately $2.1 million of which is expected to be
realized in the second quarter of 2019 and approximately $2.2 million of
which will be non-cash. These rationalization charges include the
write-down in carrying value of assets, employee severance costs and
plant exit costs related to the plant closings.
While the Company has had annual funding requirements to the Central
States Pension Fund, the Company’s payments to the Central States
Pension Fund as a result of its complete withdrawal from such pension
fund will be fixed and will be for a definite period not to exceed
twenty years. As a result, the Company also expects to recognize an
estimated pre-tax rationalization charge of approximately $37 million in
2019 for the present value of the currently estimated withdrawal
liability, of which approximately $36 million is expected to be
recognized in the second quarter of 2019. The Company expects that its
annual withdrawal payments to the Central States Pension Fund will be
approximately $2.8 million for no more than twenty years, likely
starting in 2020. Although the annual withdrawal payments will be
somewhat higher than the Company’s current annual funding requirements
to the Central States Pension Fund, such increase will not be
significant to the Company. The actual amount of the charge and payments
could vary based on final benefit calculations.
The Company’s earnings guidance for adjusted net income per diluted
share for the full year 2019 and second quarter of 2019 are not impacted
by the rationalization charges to be incurred in connection with the
plant closings and the withdrawal from the Central States Pension Fund,
as these charges are treated as adjustments for purposes of adjusted net
income per diluted share. These charges will also not have an impact on
the Company’s estimate of free cash flow for 2019.
Silgan is a leading supplier of rigid packaging for consumer goods
products with annual net sales of approximately $4.4 billion in 2018.
Silgan operates 100 manufacturing facilities in North and South America,
Europe and Asia. The Company is a leading supplier of metal containers
in North America and Europe for food and general line products. The
Company is also a leading worldwide supplier of metal and plastic
closures and dispensing systems for food, beverage, health care, garden,
personal care, home and beauty products. In addition, the Company is a
leading supplier of plastic containers for shelf-stable food and
personal care products in North America.
Statements included in this press release 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
the Securities Exchange Act of 1934, as amended. 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 2018 and other
filings with the Securities and Exchange Commission. Therefore, the
actual results of operations or financial condition of the Company could
differ materially from those expressed or implied in such forward
View source version on businesswire.com: https://www.businesswire.com/news/home/20190604006089/en/
Source: Silgan Holdings Inc.
Silgan Holdings Inc.
Robert B. Lewis, (203) 406-3160