On April 25, 2019 West Pharmaceutical Services, Inc. (NYSE: WST) reported its financial results for the first-quarter 2019 and updated full-year 2019 financial guidance (Press release, West Pharmaceutical Services, APR 25, 2019, View Source [SID1234535394]).
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First-Quarter 2019 Summary (comparisons to prior-year period)
Net sales of $443.5 million grew 7%, organic sales growth was 11%
Reported-diluted EPS of $0.73 increased 26%
Adjusted-diluted EPS of $0.74 increased 19%
Repurchased 800,000 shares of common stock for $83.1 million
Company reaffirms full-year 2019 net sales guidance and raises full-year 2019 adjusted-diluted EPS guidance to a new range between $2.80 and $2.90, compared to a prior range between $2.77 and $2.89.
"Adjusted-diluted EPS" and "organic sales growth" are Non-U.S. GAAP measurements. See discussion under the heading "Non-U.S. GAAP Financial Measures" in this release.
"Our organization executed on multiple fronts to deliver a strong start to the year, with good growth performance across all segments and market units," said Eric M. Green, President and Chief Executive Officer. "With double-digit organic sales growth in high-value products, coupled with continued execution on Global Operations strategic initiatives, we expanded adjusted operating profit margin by 250 basis points."
Proprietary Products Segment
Net sales grew by 4.3% to $340.4 million. Organic sales growth was 9.4% with currency translation decreasing sales by 5.1%. High-value products (HVP) represented 60% of segment sales and had double-digit organic sales growth.
Our Biologics market unit had double-digit organic sales growth, led by HVP components such as NovaPure and Westar RU. Our Generics market unit had high-single digit organic sales growth, seeing a substantial increase in sales related to self-injection delivery device development agreements. Our Pharma market unit had low-single digit growth, impacted by a decline in Vial2Bag sales due to our previously discussed voluntary recall.
Contract-Manufactured Products Segment
Net sales grew by 15.3% to $103.1 million. Organic sales growth was 18.9% with currency translation decreasing sales by 3.6%. Segment performance was led by strong sales of healthcare-related injection and diagnostic devices.
Financial Highlights
Operating cash flow was $47.6 million, an increase of 5.8%. Capital expenditures in the quarter were $28.8 million. Free cash flow (operating cash flow minus capital expenditures) was $18.8 million, an increase of 10.6%.
During the quarter, the Company repurchased 800,000 shares for $83.1 million at an average share price of $103.89, which completed the 2019 share repurchase program authorized by the Company’s Board of Directors.
The Company recorded $0.6 million of restructuring and related charges in the first-quarter 2019 from Global Operations actions that are streamlining our manufacturing network. This plan is expected to be completed by the end of 2019 and to require $7.0 million of restructuring and related charges in 2019. Implemented in the first-quarter of 2018, the Company expects cumulative expenses over the plan period to be approximately $15.0 million. Once fully completed, the Company anticipates that the plan will provide annualized savings of approximately $14.0 million.
Full-Year 2019 Financial Guidance
Continuing to expect net sales to be in a range between $1.795 billion and $1.820 billion
Reaffirming organic sales growth range of 6% to 8%
Net sales guidance includes a headwind of $34 million to $37 million for the full-year 2019 based on current foreign exchange rates, compared to prior guidance of a full-year negative impact of $30 million
Raising adjusted-diluted EPS to a new range between $2.80 and $2.90, compared to prior guidance range between $2.77 and $2.89
Includes an estimated headwind of approximately $0.07 to $0.08 based on current foreign currency exchange rates, compared to prior guidance of a full-year negative impact of $0.06
First-Quarter 2019 Conference Call
The Company will host a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time today. To participate on the call please dial 877-930-8295 (U.S.) or 253-336-8738 (International). The conference ID is 7794502.
A live broadcast of the conference call will be available at the Company’s website, www.westpharma.com, in the "Investors" section. Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company’s website.
An online archive of the broadcast will be available at the website three hours after the live call and will be available through Thursday, May 2, 2019, by dialing 855-859-2056 (U.S.) or 404-537-3406 (International) and entering conference ID 7794502.
Investor Contact:
Media Contact:
Quintin Lai
Emily Denney
Vice President, Investor Relations
Vice President, Communications
(610) 594-3318
(610) 594-3035