Aptargroup, Inc.: Form 10-Q for the period ended Jun 30, 2025

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, OR AS OTHERWISE INDICATED)

RESULTS OF OPERATIONS

(1) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under “Non-U.S. GAAP Measures.”

NET SALES

We reported net sales of $966.0 million for the quarter ended June 30, 2025, which represents a 6% increase compared to $910.1 million reported during the second quarter of 2024. The U.S. dollar weakened against most European currencies but strengthened against most Latin American currencies, resulting in a positive 3% currency translation impact at the consolidated level. Current year acquisitions did not impact the consolidated sales increase. Therefore, core sales, which excludes acquisitions and changes in foreign currency rates, increased by 3% in the second quarter of 2025 compared to the same period in 2024. All three segments contributed to our core sales increase during the second quarter of 2025.

Reported net sales for the first six months of 2025 increased 2% to $1.85 billion compared to $1.83 billion for the first six months of 2024. Neither changes in foreign currency exchange rates nor acquisitions significantly impacted our consolidated results during the first six months of 2025. Therefore, core sales, which exclude acquisitions and changes in foreign currency rates, also increased 2% for the first six months of 2025 compared to the same period in 2024. Volume growth in our Aptar Pharma and Aptar Closures segments more than compensated for slightly lower results in our Aptar Beauty segment.

(1) Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

The following table sets forth, for the periods indicated, net sales by geographic location based on shipped to locations:

For discussion regarding net sales by reporting segment, please refer to the analysis of segment net sales and segment Adjusted EBITDA on the following pages.

COST OF SALES (EXCLUSIVE OF DEPRECIATION AND AMORTIZATION SHOWN BELOW)

Cost of sales (“COS”) as a percentage of net sales decreased to 62.0% in the second quarter of 2025 compared to 62.4% in the second quarter of 2024. Our COS percentage was positively impacted by an improved mix of our higher-margin Pharma product sales and royalties compared to the same period in 2024. We also benefited from improved operational performance and cost management initiatives, which offset an increase in input costs.

For the first six months of 2025, COS as a percentage of net sales decreased to 62.1% compared to 63.0% in the same period in 2024. This decrease is mainly due to the improved mix of higher-margin Pharma product sales and royalties along with improved operational performance and savings from our cost management initiatives discussed above.

SELLING, RESEARCH & DEVELOPMENT AND ADMINISTRATIVE

Selling, research & development and administrative expenses (“SG&A”) increased by approximately $1.8 million to $151.1 million in the second quarter of 2025 compared to $149.3 million during the same period in 2024. Excluding changes in foreign currency rates, SG&A decreased by approximately $1.8 million in the quarter mainly as a result of our cost optimization efforts. Also, higher bad debt costs due to a reversal of a specific customer reserve in the 2024 period were more than compensated by lower costs to evaluate potential acquisition targets in the 2025 period. SG&A as a percentage of net sales decreased to 15.6% in the second quarter of 2025 compared to 16.4% in the same period in 2024.

Our SG&A expenses increased by approximately $4.3 million to $306.4 million in the first six months of 2025 compared to $302.1 million during the same period in 2024. Excluding changes in foreign currency rates, SG&A increased by approximately $4.0 million in the first six months of 2025 compared to the first six months of 2024. Bad debt and compensation cost increases more than offset the lower acquisition evaluation costs during 2025. SG&A as a percentage of net sales decreased slightly to 16.5% in the first six months of 2025 compared to 16.6% in the same period in 2024.

DEPRECIATION AND AMORTIZATION

Reported depreciation and amortization expenses increased by approximately $4.9 million to $69.9 million in the second quarter of 2025 compared to $65.0 million during the same period in 2024. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately $3.3 million in the second quarter of 2025 compared to the same period a year ago. This increase is due to higher capital investments made during the prior years to support our growth strategy. Depreciation and amortization as a percentage of net sales increased to 7.2% in the second quarter of 2025 compared to 7.1% in the same period of the prior year.

Depreciation and amortization expenses increased by approximately $6.2 million to $135.6 million in the first six months of 2025 compared to $129.3 million during the same period a year ago. Excluding changes in foreign currency rates, depreciation and amortization increased by approximately $6.3 million in the first six months of 2025 compared to the same period a year ago. As discussed above, this increase is due to higher capital investments made during the prior years to support our growth strategy. Depreciation and amortization as a percentage of net sales increased to 7.3% in the first six months of 2025 compared to 7.1% in the same period of the prior year.

RESTRUCTURING INITIATIVES

For the three and six months ended June 30, 2025, we recognized $1.6 million and $3.6 million, respectively of restructuring costs related to our initiatives to better leverage our fixed cost base through growth and cost reduction measures. For the three and six months ended June 30, 2024, we recognized $2.3 million and $5.8 million of restructuring costs related to these initiatives, respectively. The cumulative expense incurred as of June 30, 2025 was $68.3 million.

Restructuring costs for the three and six months ended June 30, 2025 and 2024 were as follows:

OPERATING INCOME

Operating income increased approximately $18.4 million to $144.4 million in the second quarter of 2025 compared to $126.0 million in the same period a year ago. Excluding changes in foreign currency rates, operating income increased by approximately $14.1 million in the quarter compared to the same period a year ago mainly due to sales growth in our Aptar Pharma and Aptar Closures segments along with improved operational performance and cost management initiatives. Operating income as a percentage of net sales increased to 15.0% in the second quarter of 2025 compared to 13.8% in the prior year period.

For the first six months of 2025, operating income increased by approximately $19.7 million to $257.8 million compared to $238.1 million in the same period of the prior year. Excluding changes in foreign currency rates, operating income increased by approximately $19.3 million in the first six months of 2025 compared to the same period a year ago. This increase was driven by sales growth from our Aptar Pharma segment and effective cost management efforts. Operating income as a percentage of net sales increased to 13.9% in the first six months of 2025 compared to 13.0% for the same period in the prior year.

INTEREST EXPENSE

Interest expense increased approximately $0.8 million to $10.9 million in the second quarter of 2025 compared to $10.1 million for the same period of the prior year. During 2024, we replaced more than $370 million of private placement debt having interest rates between 1.2% and 3.5% with term loan and revolving credit facility borrowings having current variable interest rates between 2.98% and 5.83%.

Interest expense increased $2.0 million to $22.2 million in the first six months of 2025 compared to $20.2 million during the same period in 2024. See Note 6 - Debt to the Condensed Consolidated Financial Statements for further details.

NET OTHER INCOME (EXPENSE)

Net other income increased $3.9 million to $6.2 million in the second quarter of 2025 from $2.3 million in the same period of the prior year. We realized strong returns from our equity method investments of $2.1 million and also recorded a $2.2 million increase in the value of our PureCycle investment over the prior year period.

Net other income increased $5.4 million to $10.1 million of income for the six months ended June 30, 2025 from $4.7 million of income in the same period of the prior year. This increase is mainly due to approximately $4.5 million in higher equity results from affiliates.

PROVISION FOR INCOME TAXES

The effective tax rate for the three months ended June 30, 2025 and 2024 was 20.0% and 23.5% respectively. The effective tax rate for the three months ended June 30, 2025 reflects a deferred tax benefit of $8.3 million resulting from the release of a valuation allowance, and greater tax benefits from share-based compensation. The release of the valuation allowance reflects profitable results in locations that previously operated with tax losses. The effective tax rate for the six months ended June 30, 2025 and 2024 was 22.5% and 22.1%, respectively. The effective tax rate for the six months ended June 30, 2025 includes tax benefits from the valuation allowance release and from share-based compensation, offset by a one-time French surtax. The tax rate for 2024 reflects tax incentives in certain non-US jurisdictions from intellectual property development activities and a similar amount of tax benefits from share-based compensation.

NET INCOME ATTRIBUTABLE TO APTARGROUP, INC.

We reported net income attributable to AptarGroup, Inc. of $111.7 million and $190.5 million in the three and six months ended June 30, 2025, respectively, compared to $90.5 million and $173.6 million for the same periods in the prior year.

APTAR PHARMA SEGMENT

Operations that sell proprietary dispensing systems, drug delivery systems, sealing solutions and services to the prescription drug, consumer health care, injectables, active material science solutions and digital health markets form our Aptar Pharma segment.

(1) Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization, restructuring initiatives, acquisition-related costs, net unrealized investment gains and losses related to observable market price changes on equity securities and other special items. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under “Non-U.S. GAAP Measures.”

Net sales for the Aptar Pharma segment increased 7% in the second quarter of 2025 to $442.6 million compared to $414.5 million in the second quarter of 2024. Changes in currencies positively affected net sales by 4%. Therefore, core sales increased by 3% in the second quarter of 2025 compared to the second quarter of 2024. The majority of the sales growth is due to higher volumes in our prescription drug, injectables and active material science solutions divisions. Core sales of our products to the prescription drug market increased 8% on strong demand for our products used on emergency medicines and asthma, COPD applications along with $3.3 million in higher customer royalties. The 14% core sales decline in the consumer health care market was mainly driven by softer nasal decongestant, nasal saline and cough and cold volumes. Sales of our products and services to the injectables market increased 9% on strong GLP-1 component sales, while active material science solutions increased 11% mainly on strong active film sales growth. Digital Health currently does not represent a significant percentage of the total Pharma sales.

Net sales for the first six months of 2025 increased by approximately 4% to $852.1 million compared to $821.8 million in the first six months of 2024. Changes in currency rates negatively impacted net sales by 1% during the first six months of 2025. Therefore, core sales increased by 3% in the first six months of 2025 compared to the same period in the prior year. Strong volume growth and royalty increases more than compensated for lower tooling sales and pricing adjustments to secure longer-term contracts. Core sales of products included in our prescription drug division increased 9% on continued strong demand for our central nervous system and emergency medicine solutions along with higher revenues received from customer royalties. Core sales in the consumer health care market decreased 12% as higher demand for our eye care solutions was offset by lower sales of nasal decongestant, nasal saline and cough and cold products. Injectables core sales increased by 1% despite a challenging comparison to the first half of 2024 which experienced a 14% increase in revenues related to a catch-up period following an enterprise resource planning system implementation. Core sales of our active material science solutions increased 11% mainly on higher demand for our active film and diabetes protection technologies. Digital Health currently does not represent a significant percentage of the total Pharma sales.

(1) Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

Adjusted EBITDA in the second quarter of 2025 increased 11% to $156.8 million compared to $141.5 million in the same period of the prior year. This increase was mainly due to the profitability of strong prescription drug, injectables and active material science solutions sales growth along with the higher customer royalties and improved operational performance. As a result, our Adjusted EBITDA margin improved to 35.4% in the second quarter of 2025 from 34.1% in the second quarter of 2024.

Adjusted EBITDA in the first six months of 2025 increased 9% to $299.3 million compared to $273.7 million in the same period of the prior year. This increase was mainly due to the strong core sales growth in prescription and active material solutions along with higher royalty income as discussed above. Overall, our Adjusted EBITDA margin improved to 35.1% in the first six months of 2025 compared to 33.3% in the first six months of 2024.

APTAR BEAUTY SEGMENT

Operations that sell dispensing systems and sealing solutions to the beauty, personal care and home care markets form our Aptar Beauty segment.

(1) Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization, restructuring initiatives, acquisition-related costs, net unrealized investment gains and losses related to observable market price changes on equity securities and other special items. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under “Non-U.S. GAAP Measures.”

Reported net sales for the quarter ended June 30, 2025 increased 4% to $334.8 million compared to $321.5 million in the second quarter of the prior year. Changes in currency rates and acquisitions positively impacted net sales by 2% and 1%, respectively, in the second quarter of 2025. Therefore, core sales increased 1% in the second quarter of 2025 compared to the same quarter of the prior year, mainly on stronger tooling sales. Core sales to the beauty market decreased 4% as strong sales to our mass fragrance customers could not compensate for lower sales of skincare applications for the indie brand market as well as softer demand for our prestige fragrance dispensing technologies as customers plan around current tariff-related uncertainties. Personal care improved by 11% on strong sales of our hair care and body and skin care applications, while home care core sales were flat.

For the first six months of 2025, reported net sales of $640.6 million decreased 1% compared to $648.8 million reported in the first six months of the prior year. Changes in currency rates did not have a significant impact on the 2025 results. Therefore, core sales also decreased 1% in the first six months of 2025 compared to the same period in the prior year. Sales gains in North America, Latin America and Asia could not compensate for lower European and specialty skincare applications for the indie brand market. Core sales of our products to the beauty market decreased 7% during the first six months of 2025 due to softer European demand for our prestige fragrance technologies and facial skin care products. However, personal care core sales improved 10% over the prior year on higher sales of our hair care and body and skin care products. Also, core sales of our home care market products improved 7% on higher demand from our customers selling air care and surface cleaning products.

(1) Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

Adjusted EBITDA in the second quarter of 2025 increased 5% to $47.1 million compared to $44.6 million in the same period in the prior year. This is primarily attributable to higher tooling sales mentioned above. We also benefited from improved operational performance and the performance of our equity method investments along with improvements realized from our cost management initiatives during the second quarter of 2025. These improvements led to our Adjusted EBITDA margin increasing from 13.9% in the second quarter of 2024 to 14.1% during the second quarter of 2025.

Adjusted EBITDA in the first six months of 2025 decreased 2% to $84.2 million compared to $85.8 million reported in the same period in the prior year. Improved results from our equity method investments and savings realized from our cost improvement initiatives could not fully offset the lower beauty and indie brand skin care volumes mentioned above. Therefore, our Adjusted EBITDA margin declined slightly from 13.2% in the first six months of 2024 to 13.1% during the first six months of 2025.

APTAR CLOSURES SEGMENT

Operations that sell dispensing closures, sealing solutions and food service trays to the food, beverage, personal care, home care, beauty and healthcare markets form our Aptar Closures segment. Our food protection business and elastomeric flow-control technology business continue to report through the Aptar Closures segment.

(1) Adjusted EBITDA is calculated as earnings before net interest, taxes, depreciation, amortization, restructuring initiatives, acquisition-related costs, net unrealized investment gains and losses related to observable market price changes on equity securities and other special items. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Reported Net Sales. See the reconciliation under “Non-U.S. GAAP Measures.”

Reported sales for the quarter ended June 30, 2025 increased approximately 8% to $188.6 million compared to $174.0 million in the second quarter of the prior year. Changes in currency rates positively impacted net sales by 1%. Therefore, core sales for the second quarter of 2025 increased approximately 7% from the same quarter of the prior year. The majority of the increase during the current quarter is due to higher product sales in our food and beverage markets. Sales to the food market increased 13% on higher sales of our dispensing closures across a number of applications including sauces and condiments, food service, salad dressing and spreads, jellies and honey. The 7% increase in beverage market sales was mainly due to higher sales of our closures on functional drink products. Personal care sales declined 4% mainly due to lower tooling sales, while other sales increased 1% on higher sales of our laundry and dish care products.

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Net sales for the first six months of 2025 increased approximately 2% to $360.7 million compared to $354.9 million in the first six months of 2024. Changes in currency rates negatively impacted net sales by 1%. Therefore, core sales increased approximately 3% in the first six months of 2025 compared to the same period in the prior year. During the first six months of 2025, liquid coffee creamer product sales were reclassified from our food market to the beverage market to better align with how those products are currently managed. All prior period amounts have been revised to conform to the current year presentation. While core product sales to our food and beverage markets each increased 7% and 4% respectively, both were negatively impacted by 2% lower tooling sales compared to the first six months of 2024. For the food market, we reported strong product sales of our closures for salad dressing, spread, jellies and honey, granulars and powders and Asian sauce products. Core sales to our beverage customers during the first six months of 2025 increased on improving functional drink application sales. Personal care core sales declined on lower tooling and sales of our hair care solutions while the other markets improved by 3% on stronger sales of our laundry and dish care products.

(1) Currency effects are calculated by translating last year’s amounts at this year’s foreign exchange rates.

(2) Other includes beauty, home care and healthcare markets.

Adjusted EBITDA in the second quarter of 2025 increased 18% to $31.9 million compared to $27.1 million reported in the same period of the prior year. Sales growth, along with operational improvements, utilization improvements and cost containment initiatives drove the improvement during the current quarter. Therefore, our Adjusted EBITDA margin improved from 15.6% in the second quarter of 2024 to 16.9% during the second quarter of 2025.

Adjusted EBITDA in the first six months of 2025 increased 9% to $59.1 million compared to $54.3 million reported in the same period of the prior year. Our profitability was positively impacted by the higher product sales discussed above along with our cost improvement initiatives which more than compensated for a lower tooling contribution. This led to our Adjusted EBITDA margin improving from 15.3% in the first six months of 2024 to 16.4% during the first six months of 2025.

CORPORATE & OTHER

In addition to our three reporting segments, we assign certain costs to “Corporate & Other,” which is presented separately in Note 16 – Segment Information of the Notes to the Condensed Consolidated Financial Statements. For Corporate & Other, Adjusted EBITDA (which excludes net interest, taxes, depreciation, amortization, restructuring initiatives, acquisition-related costs, net unrealized investment gains and losses related to observable market price changes on equity securities and other special items) primarily includes certain professional fees, compensation and information system costs along with certain equity method investments which are not allocated directly to our reporting segments.

For the quarter ended June 30, 2025, Corporate & Other costs decreased to $17.4 million from $20.5 million in the second quarter of 2024. Improved performance of certain equity method investments along with lower costs to evaluate potential acquisition targets in 2025 lead to the current quarter improvement compared to the prior year period.

For the first six months of 2025 Corporate & Other costs decreased to $40.9 million compared to $42.1 million reported in the same period of the prior year. This decrease is mainly due to the improved performance of our equity method investments and lower costs to evaluate acquisition targets mentioned above, which more than offset higher incentive compensation costs, including higher accrual rates for certain equity compensation programs.

NON-U.S. GAAP MEASURES

In addition to the information presented herein that conforms to U.S. GAAP, we also present financial information that does not conform to U.S. GAAP, which are referred to as non-U.S. GAAP financial measures. Management may assess our financial results both on a U.S. GAAP basis and on a non-U.S. GAAP basis. We believe it is useful to present these non-U.S. GAAP financial measures because they allow for a better period over period comparison of operating results by removing the impact of items that, in management’s view, do not reflect our core operating performance. These non-U.S. GAAP financial measures should not be considered in isolation or as a substitute for U.S. GAAP financial results, but should be read in conjunction with the unaudited Condensed Consolidated Statements of Income and other information presented herein. Investors are cautioned against placing undue reliance on these non-U.S. GAAP measures. Further, investors are urged to review and consider carefully the adjustments made by management to the most directly comparable U.S. GAAP financial measures to arrive at these non-U.S. GAAP financial measures.

In our Management’s Discussion and Analysis, we exclude the impact of foreign currency translation when presenting net sales and other information, which we define as “constant currency.” Core sales, which excludes the impact of foreign currency translation is a non-U.S. GAAP financial measure. Core sales growth is calculated as current-period core sales less prior period core sales divided by prior period core sales multiplied by a hundred. As a worldwide business, it is important that we take into account the effects of foreign currency translation when we view our results and plan our strategies. Consequently, when our management looks at our financial results to measure the core performance of our business, we may exclude the impact of foreign currency translation by translating our prior period results at current-period foreign currency exchange rates. As a result, our management believes that these presentations are useful internally and may be useful to investors. We also exclude the impact of acquisitions when comparing results to prior periods. Changes in operating results excluding the impact of acquisitions are non-U.S. GAAP financial measures. We believe it is important to exclude the impact of acquisitions on period over period results in order to evaluate performance on a more comparable basis.

We present earnings before net interest and taxes (“EBIT”) and earnings before net interest, taxes, depreciation and amortization (“EBITDA”). We also present our adjusted earnings before net interest and taxes (“Adjusted EBIT”) and adjusted earnings before net interest, taxes, depreciation and amortization (“Adjusted EBITDA”), both of which exclude restructuring initiatives, acquisition-related costs, purchase accounting adjustments related to acquisitions and investments and net unrealized investment gains and losses related to observable market price changes on equity securities. Our Outlook is also provided on a non-U.S. GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled, such as exchange rates and changes in the fair value of equity investments, or reliably predicted because they are not part of our routine activities, such as restructuring initiatives and acquisition-related costs.

We provide a reconciliation of Net Debt to Net Capital as a non-U.S. GAAP measure. “Net Debt” is calculated as interest-bearing debt less cash and equivalents and short-term investments while “Net Capital” is calculated as stockholders’ equity plus Net Debt. Net Debt to Net Capital measures a company’s financial leverage, which gives users an idea of a company's financial structure, or how it is financing its operations, along with insight into its financial strength. We believe that it is meaningful to take into consideration the balance of our cash, cash equivalents and short-term investments when evaluating our leverage. If needed, such assets could be used to reduce our gross debt position.

Finally, we provide a reconciliation of free cash flow as a non-U.S. GAAP measure. Free cash flow is calculated as cash provided by operating activities less capital expenditures plus proceeds from government grants related to capital expenditures. We use free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. We believe that it is meaningful to investors in evaluating our financial performance and measuring our ability to generate cash internally to fund our initiatives.

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FOREIGN CURRENCY

Because of our international presence, movements in exchange rates can have a significant impact on the translation of the financial statements of our foreign subsidiaries. Our primary foreign exchange exposure is to the euro, but we also have foreign exchange exposure to the Chinese yuan, Brazilian real, Argentine peso, Mexican peso, Swiss franc and other Asian, European and Latin American currencies. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial statements. Conversely, a strengthening U.S. dollar has a dilutive effect. We manage our exposures to foreign exchange principally with forward exchange contracts to economically hedge recorded transactions and firm purchase and sales commitments denominated in foreign currencies.

During the six months ended June 30, 2025, the U.S. dollar was weaker compared to all currencies except Latin America currencies, Chinese yuan, Indian rupee and Indonesia rupiah. This resulted in an additive impact on our translated results during the second quarter of 2025 when compared to the second quarter of 2024.

QUARTERLY TRENDS

Our results of operations in the fourth quarter of the year are typically negatively impacted by customer plant shutdowns in December. Several of the markets we serve are impacted by the seasonality of underlying consumer products. This, in turn, may have an impact on our net sales and results of operations for those markets. The diversification of our product portfolio minimizes fluctuations in our overall quarterly financial statements and results in an immaterial seasonality impact on our Condensed Consolidated Financial Statements when viewed quarter over quarter.

Generally, we have incurred higher stock-based compensation expense in the first quarter compared with the rest of the fiscal year due to the timing and recognition of stock-based expense from substantive vesting for retirement eligible employees. As of June 30, 2025, our estimated stock-based compensation expense on a pre-tax basis for the year 2025 compared to 2024 is as follows:

LIQUIDITY AND CAPITAL RESOURCES

Given our current level of leverage and our ability to generate cash flow from operations, we believe we are in a strong financial position to meet our business requirements in the foreseeable future. We have historically used cash flow from operations, our revolving and other credit facilities, as needed, as our primary sources of liquidity. Our primary uses of cash are to invest in equipment, capacity expansions and as working capital for the continued growth of our business and to achieve our strategic objectives. We also use cash to pay quarterly dividends to stockholders, invest in the acquisition of new businesses and repurchase shares of our common stock. Due to uncertain macroeconomic conditions, including rising interest rates, inflation and the impact of tariffs and related trade restrictions, if there was a prolonged decrease in customer demand and that decrease adversely impacted our cash flows from operations, we would have the ability to restrict and significantly reduce capital expenditure levels and share repurchases, as well as reevaluate our acquisition strategy. A prolonged and significant reduction in capital expenditure levels could increase future repairs and maintenance costs as well as have a negative impact on operating margins if we were unable to invest in new innovative products.

Cash and equivalents and restricted cash decreased to $161.7 million at June 30, 2025 from $223.8 million at December 31, 2024. Total short and long-term interest-bearing debt increased from $1.03 billion at December 31, 2024 to $1.09 billion at June 30, 2025. The ratio of our Net Debt (interest-bearing debt less cash and cash equivalents) to Net Capital (stockholders’ equity plus Net Debt) increased to 25.2% at June 30, 2025 from 24.4% at December 31, 2024. See the reconciliation under “Non-U.S. GAAP Measures.”

In the first six months of 2025, our operations provided approximately $208.7 million in net cash flow compared to $235.9 million for the same period a year ago. In both periods, cash flow from operations was primarily derived from earnings before depreciation and amortization.

We used $126.1 million in cash for investing activities during the first six months of 2025 compared to $145.0 million during the same period a year ago. Our investment in capital projects decreased $26.9 million during the first six months of 2025 compared to the first six months of 2024 as we completed larger projects that had higher spend in the prior year.

Financing activities used $162.0 million in cash during the first six months of 2025 compared to $89.0 million in cash used by financing activities during the same period a year ago. The increased use of cash in the first six months of 2025 is primarily related to $132.9 million of additional treasury stock purchases as compared to the prior year and $17.2 million less of proceeds from stock option exercises.

In October 2020, we entered into an unsecured money market borrowing arrangement to provide short-term financing of up to $30 million that is available in the U.S. No balance was outstanding under this arrangement as of June 30, 2025.

We have a revolving credit facility (the “revolving credit facility”) with a syndicate of banks which provides us with unsecured financing of up to $600 million, which may be increased by up to $300 million subject to certain conditions. The revolving credit facility is available in the U.S. and to our wholly-owned UK subsidiary and can be drawn in various currencies including USD, EUR, GBP, and CHF. The revolving credit facility was set to mature in June 2026, but on July 2, 2024, we entered into a new amended and restated agreement (the “amended revolving credit facility”) that extended the maturity date to July 2029, subject to a maximum of two one-year extensions in certain circumstances. As of December 31, 2024, €170.0 million ($176.0 million) was utilized under the revolving credit facility in the U.S. and no balance was utilized by our wholly-owned UK subsidiary. As of June 30, 2025, we had utilized $111.5 million and €130 million ($153.1 million) under the amended revolving credit facility in the U.S. and no balance was utilized by our wholly-owned UK subsidiary.

There are no compensating balance requirements associated with our amended revolving credit facility. Each borrowing under the revolving credit facility will bear interest at rates based on SOFR (in the case of USD), EURIBOR (in the case of EUR), SONIA (in the case of GBP), SARON (in the case of CHF), prime rates or other similar rates, in each case plus an applicable margin. The amended revolving credit facility also provides mechanics relating to a transition away from designated benchmark rates for other available currencies and the replacement of any such applicable benchmark by a replacement alternative benchmark rate or mechanism for loans made in the applicable currency. A facility fee on the total amount of the amended revolving credit facility is also payable quarterly, regardless of usage. The applicable margins for borrowings under the amended revolving credit facility and the facility fee percentage may change from time to time depending on changes in our consolidated leverage ratio. Credit facility balances are included in revolving credit facility and overdrafts on the Condensed Consolidated Balance Sheets.

On July 2, 2024, we entered into a term loan with a syndicate of banks (the “Term Loan”). The Term Loan matures in July 2027. As of June 30, 2025, $141.1 million was utilized under the Term Loan facility.

Our amended revolving credit facility and corporate long-term obligations require us to satisfy certain financial and other covenants including:

(1) Definitions of ratios are included as part of the amended revolving credit facility agreement and private placement agreements.

Based upon the above consolidated leverage ratio covenant, we would have the ability to borrow approximately an additional $1.9 billion before the 3.50 to 1.00 maximum ratio requirement would be exceeded.

On July 6, 2022, we entered into an agreement to swap approximately $200 million of our fixed USD debt to fixed EUR debt which would generate interest savings of approximately $0.5 million per quarter based upon exchange rates as of the transaction date.

On July 10, 2025, 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.

Our foreign operations have historically met cash requirements with the use of internally generated cash or uncommitted short-term borrowings. We also have committed financing arrangements in both the U.S. and the UK as detailed above. We manage our global cash requirements considering (i) available funds among the many subsidiaries through which we conduct business, (ii) the geographic location of our liquidity needs, and (iii) the cost to access international cash balances.

CONTINGENCIES

The Company, in the normal course of business, is subject to a number of lawsuits and claims both actual and potential in nature. Please refer to Note 12 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for a discussion of contingencies affecting our business.

RECENTLY ISSUED ACCOUNTING STANDARDS

We have reviewed the recently issued ASUs to the FASB’s Accounting Standards Codification that have future effective dates. Standards that have been adopted during 2025 are discussed in Note 1 – Summary of Significant Accounting Policies of the Notes to Condensed Consolidated Financial Statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our Condensed Consolidated Financial Statements upon adoption.

OUTLOOK

We expect earnings per share for the third quarter of 2025, excluding any restructuring expenses, changes in the fair value of equity investments and acquisition costs, to be in the range of $1.53 to $1.61 and this guidance is based on an effective tax rate range of 20.5% to 22.5%. Our total 2025 estimated cash outlays for capital expenditures net of government grant proceeds are expected to be approximately $270 million to $290 million.

FORWARD-LOOKING STATEMENTS

Certain statements in Management’s Discussion and Analysis and other sections of this Form 10-Q are forward-looking and involve a number of risks and uncertainties, including certain statements set forth in the Significant Developments, Restructuring Initiatives, Quarterly Trends, Liquidity and Capital Resources, Contingencies and Outlook sections of this Form 10-Q. Words such as “expects,” “anticipates,” “believes,” “estimates,” “future,” “potential”, “are optimistic” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are based on our beliefs as well as assumptions made by and information currently available to us. Accordingly, our actual results or other events may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in our operations and business environment including, but not limited to:

• geopolitical conflicts worldwide including the ongoing conflict in Ukraine with the Russian military and the resulting indirect impact on demand from our customers selling their products into these countries, and certain supply chain disruptions;
• cybersecurity threats against our systems and/or service providers that could impact our networks and reporting systems;
• the availability of raw materials and components (particularly from sole-sourced suppliers for some of our Pharma solutions) as well as the financial viability of these suppliers;
• our ability to protect and defend our intellectual property rights, as well as litigation involving intellectual property rights;
• the outcome of any legal proceeding that has been or may be instituted against us and others;
• lower demand and asset utilization due to an economic recession either globally or in key markets we operate within;
• economic conditions worldwide, including inflationary conditions and potential deflationary conditions in other regions we rely on for growth;
• competition, including technological advances;
• significant tariffs and other restrictions on foreign imports imposed by the U.S. and related countermeasures are taken by impacted foreign countries;
• the execution of our fixed cost reduction initiatives, including our optimization initiative;
• our ability to successfully implement facility expansions and new facility projects;
• fluctuations in the cost of materials, components, transportation cost as a result of supply chain disruptions and labor shortages, and other input costs;
• significant fluctuations in foreign currency exchange rates or our effective tax rate;
• the impact of tax reform legislation, changes in tax rates and other tax-related events or transactions that could impact our effective tax rate and cash flow;
• financial conditions of customers and suppliers;
• consolidations within our customer or supplier bases;
• changes in customer and/or consumer spending levels;
• loss of one or more key accounts;
• our ability to offset inflationary impacts with cost containment, productivity initiatives and price increases;
• changes in capital availability or cost, including rising interest rates;
• volatility of global credit markets;
• our ability to identify potential new acquisitions and to successfully acquire and integrate such operations, including the successful integration of the businesses we have acquired;
• our ability to build out acquired businesses and integrate the product/service offerings of the acquired entities into our existing product/service portfolio;
• direct or indirect consequences of acts of war, terrorism or social unrest;
• the impact of natural disasters and other weather-related occurrences;
• fiscal and monetary policies and other regulations;
• changes, difficulties or failures in complying with government regulation, including FDA or similar foreign governmental authorities;
• changing regulations or market conditions regarding environmental sustainability;
• our ability to retain key members of management and manage labor costs;
• work stoppages due to labor disputes;
• our ability to meet future cash flow estimates to support our goodwill impairment testing;
• the demand for existing and new products;
• the success of our customers’ products, particularly in the pharmaceutical industry;
• our ability to manage worldwide customer launches of complex technical products, particularly in developing markets;
• difficulties in product development and uncertainties related to the timing or outcome of product development;
• significant product liability claims; and
• other risks associated with our operations.

Although we believe that our forward-looking statements are based on reasonable assumptions, there can be no assurance that actual results, performance or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Please refer to Item 1A (Risk Factors) of Part I included in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional risks and uncertainties that may cause our actual results or other events to differ materially from those expressed or implied in such forward-looking statements.

A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of our subsidiaries. Our primary foreign exchange exposure is to the euro, but we have foreign exchange exposure to the Chinese yuan, Brazilian real, Argentine peso, Mexican peso, Swiss franc and other Asian, European and Latin American currencies. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial statements. Conversely, a strengthening U.S. dollar has a dilutive translation effect. Additionally, in some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Any changes in exchange rates on such inter-country sales may impact our results of operations.

The table below provides information as of June 30, 2025 about our forward currency exchange contracts. The majority of the contracts expire before the end of the third quarter of 2025.

As of June 30, 2025, we have recorded the fair value of foreign currency forward exchange contracts of $0.9 million in prepaid and other and $0.9 million in accounts payable, accrued and other liabilities on the Condensed Consolidated Balance Sheets. On July 6, 2022, we entered into a seven year USD/EUR fixed-to-fixed cross currency interest rate swap to effectively hedge the interest rate exposure relating to $203 million of the $400 million 3.60% Senior Notes due March 2032 which were issued by AptarGroup, Inc. on March 7, 2022. This USD/EUR swap agreement exchanged $203 million of fixed-rate 3.60% USD debt to €200 million of fixed-rate 2.5224% EUR debt. The fair value of this net investment hedge is $35.7 million reported in accounts payable, accrued and other liabilities on the Condensed Consolidated Balance Sheets.

DISCLOSURE CONTROLS AND PROCEDURES

Management has evaluated, with the participation of the chief executive officer and chief financial officer of the Company, the effectiveness of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2025. Based on that evaluation, the chief executive officer and chief financial officer have concluded that these controls and procedures were effective as of such date.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

No changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during our fiscal quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.