- Conference Call Scheduled for
Second-Quarter 2024 Summary (comparisons to prior-year period)
- Net sales of
$702.1 million declined 6.9%; organic net sales declined 5.9%. - Reported-diluted EPS of
$1.51 , compared to$2.06 in the same period last year. - Adjusted-diluted EPS of
$1.52 , compared to$2.11 in the same period last year. - The Company is updating full-year 2024 net sales guidance to a range of
$2.870 billion to$2.900 billion , compared to a prior range of$3.000 billion to$3.025 billion . - The Company is updating full-year 2024 adjusted-diluted EPS guidance to a range of
$6.35 to$6.65 , compared to a prior range of$7.63 to$7.88 .
"The second quarter continued to be impacted by an elevated level of customer destocking," said
Proprietary Products Segment
Net sales declined by 9.4% to
The Generics market unit had a double digit organic net sales decline, driven by lower volumes in FluroTec ® and Westar ® products. The Biologics market unit had a mid-single digit organic net sales decline, driven by lower sales of Daikyo CZ ® and Westar ® offset by an increase in sales of self-injection device platforms. The Pharma market unit had a low-single digit organic net sales decline, driven by a reduction in sales of Administrative Systems and Westar ® products.
Contract-Manufactured Products Segment
Net sales grew by 4.9% to
Financial Highlights (first six months of 2024)
Operating cash flow was
During the first half of 2024, the Company repurchased 1,239,015 shares for
Full-Year 2024 Financial Guidance
- The Company is updating full-year 2024 net sales guidance to a range of
$2.870 billion to$2.900 billion , compared to a prior range of$3.000 billion to$3.025 billion .- Organic net sales are now expected decrease approximately 1% to 2%.
- Net sales guidance includes an estimated full-year 2024 headwind of approximately
$5.0 million based on current foreign currency exchange rates, compared to prior guidance of approximately$8.0 million .
- Full-year 2024 adjusted-diluted EPS is expected to be in a range of
$6.35 to$6.65 , compared to prior guidance range of$7.63 to$7.88 .- Full-year adjusted-diluted EPS guidance range includes an estimated headwind of approximately
$0.03 based on current foreign currency exchange rates, compared to prior guidance of$0.04 . - The updated guidance also includes EPS of
$0.22 associated with first-half 2024 tax benefits from stock-based compensation. - For the second half of the year, our EPS guidance range assumes a tax rate of 22% and does not include potential tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in the first-half 2024 would provide a positive adjustment to our full-year adjusted-diluted EPS guidance.
- Full-year adjusted-diluted EPS guidance range includes an estimated headwind of approximately
- Full-year 2024 capital spending is expected to be
$375 million , an increase from the previous estimate of$350 million .
Second-Quarter 2024 Conference Call
The live audio-only webcast will be made available via the Company's Investor Relations website at www.westpharma.com.
To participate in the conference call by asking questions to Management, please register in advance by clicking here. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that will be used to access the call.
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.
A replay of the conference call and webcast will be available on the Company's website for 30 days.
Forward-Looking Statements
This release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include such words as "raising," "positioned," "updating," "expected," "assumes," "unchanged," "includes," "would," "provide" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this release. There is no certainty that actual results will be achieved in-line with current expectations. These forward-looking statements involve a number of risks and uncertainties. The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward-looking statements: prevailing economic conditions and general uncertainties relating thereto that may be unknown and unforeseeable; customers' changing inventory requirements and manufacturing plans and customer decisions to move forward with our new products and product categories; disruptions or limitations in the Company's manufacturing capacity; average profitability, or mix, of the products we sell; dependence on third-party suppliers and partners; increased raw material, energy and labor costs; fluctuations in currency exchange; the ability to meet development milestones with key customers; and the consequences of other geopolitical events, including natural disasters, acts of war, and global health crises. This list of important factors is not all inclusive. For a description of certain additional factors that could cause the Company's future results to differ from those expressed in any such forward-looking statements, see Part I Item 1A, entitled "Risk Factors," in the Company's Annual Report on Form 10-K for the year ended
Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-
This release contains certain non-GAAP financial measures, including organic net sales and adjusted-diluted EPS. For the purpose of aiding the comparison of our year-over-year results, we may refer to net sales and other financial results excluding the effects of changes in foreign currency exchange rates. Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the U.
WEST PHARMACEUTICAL SERVICES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in millions, except per share data) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net sales | $ 702.1 | 100 % | $ 753.8 | 100 % | $ 1,397.5 | 100 % | $ 1,470.4 | 100 % | |||||||
Cost of goods and services sold | 472.1 | 67 | 462.4 | 61 | 937.3 | 67 | 907.7 | 62 | |||||||
Gross profit | 230.0 | 33 | 291.4 | 39 | 460.2 | 33 | 562.7 | 38 | |||||||
Research and development | 17.5 | 2 | 16.5 | 2 | 35.1 | 3 | 33.6 | 2 | |||||||
Selling, general and | 83.0 | 12 | 88.4 | 12 | 169.7 | 12 | 174.4 | 12 | |||||||
Other expense (income) | 3.3 | 1 | 4.0 | 1 | 6.4 | ” | 16.9 | 1 | |||||||
Operating profit | 126.2 | 18 | 182.5 | 24 | 249.0 | 18 | 337.8 | 23 | |||||||
Interest (income) expense, net | (2.5) | ” | (2.3) | ” | (7.1) | ” | (4.9) | ” | |||||||
Other nonoperating (income) | ” | ” | (0.1) | ” | ” | ” | (0.1) | ” | |||||||
Income before income taxes | 128.7 | 18 | 184.9 | 24 | 256.1 | 18 | 342.8 | 23 | |||||||
Income tax expense | 21.9 | 3 | 34.8 | 4 | 38.3 | 3 | 58.4 | 4 | |||||||
Equity in net income of | (4.5) | (1) | (5.0) | (1) | (8.8) | (1) | (10.7) | (1) | |||||||
Net income | $ 111.3 | 16 % | $ 155.1 | 21 % | $ 226.6 | 16 % | $ 295.1 | 20 % | |||||||
Net income per share: | |||||||||||||||
Basic | $ 1.52 | $ 2.08 | $ 3.09 | $ 3.96 | |||||||||||
Diluted | $ 1.51 | $ 2.06 | $ 3.06 | $ 3.91 | |||||||||||
Average common shares | 73.0 | 74.3 | 73.3 | 74.4 | |||||||||||
Average shares assuming | 73.7 | 75.4 | 74.0 | 75.5 | |||||||||||
WEST PHARMACEUTICAL SERVICES REPORTING SEGMENT INFORMATION (UNAUDITED) (in millions) | |||||||
Three Months Ended | Six Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Proprietary Products | $ 559.7 | $ 618.0 | $ 1,119.2 | $ 1,201.1 | |||
Contract-Manufactured Products | 142.4 | 135.8 | 278.3 | 269.3 | |||
Eliminations | ” | ” | ” | ” | |||
Consolidated Total | $ 702.1 | $ 753.8 | $ 1,397.5 | $ 1,470.4 | |||
Gross Profit: | |||||||
Proprietary Products | $ 207.0 | $ 271.4 | $ 414.1 | $ 519.2 | |||
Contract-Manufactured Products | 23.0 | 20.9 | 46.1 | 44.4 | |||
Unallocated items | ” | (0.9) | ” | (0.9) | |||
Gross Profit | $ 230.0 | $ 291.4 | $ 460.2 | $ 562.7 | |||
Gross Profit Margin | 32.8 % | 38.7 % | 32.9 % | 38.3 % | |||
Operating Profit (Loss): | |||||||
Proprietary Products | $ 131.0 | $ 194.2 | $ 257.3 | $ 364.9 | |||
Contract-Manufactured Products | 17.2 | 14.9 | 34.3 | 32.3 | |||
Stock-based compensation expense | (4.3) | (7.5) | (9.3) | (16.0) | |||
General corporate costs | (17.7) | (19.1) | (33.3) | (43.4) | |||
Reported Operating Profit | $ 126.2 | $ 182.5 | $ 249.0 | $ 337.8 | |||
Reported Operating Profit Margin | 18.0 % | 24.2 % | 17.8 % | 23.0 % | |||
Unallocated items | 0.2 | 2.5 | 0.4 | 12.1 | |||
Adjusted Operating Profit | $ 126.4 | $ 185.0 | $ 249.4 | $ 349.9 | |||
Adjusted Operating Profit Margin | 18.0 % | 24.5 % | 17.8 % | 23.8 % |
WEST PHARMACEUTICAL SERVICES RECONCILIATION OF NON- Please refer to "Non- (in millions, except per share data)
| ||||
Reconciliation of Reported and Adjusted Operating Profit, Net Income and Diluted EPS | ||||
Three months ended | Operating profit | Income tax expense | Net income | Diluted EPS |
Reported ( | ||||
Unallocated items: | ||||
Amortization of acquisition-related intangible | 0.2 | ” | 0.7 | 0.01 |
Adjusted (Non- | ||||
Six months ended | Operating profit | Income tax expense | Net income | Diluted EPS |
Reported ( | ||||
Unallocated items: | ||||
Amortization of acquisition-related intangible | 0.4 | ” | 1.4 | 0.02 |
Adjusted (Non- | ||||
Three months ended | Operating profit | Income tax expense | Net income | Diluted EPS |
Reported ( | ||||
Unallocated items: | ||||
Amortization of acquisition-related intangible | 0.2 | ” | 0.7 | 0.01 |
Loss on disposal of plant (2) | 2.2 | (0.7) | 2.9 | 0.04 |
Restructuring and other charges (3) | 0.1 | (0.3) | 0.4 | ” |
Adjusted (Non- | ||||
Six months ended | Operating profit | Income tax expense | Net income | Diluted EPS |
Reported ( | ||||
Unallocated items: | ||||
Amortization of acquisition-related intangible | 0.4 | ” | 1.4 | 0.02 |
Loss on disposal of plant (2) | 11.6 | (0.7) | 12.3 | 0.16 |
Restructuring and other charges (3) | 0.1 | (0.3) | 0.4 | ” |
Adjusted (Non- |
(1) | During the three and six months ended |
(2) | During the three and six months ended |
(3) | Restructuring and other charges of |
WEST PHARMACEUTICAL SERVICES RECONCILIATION OF NON- Please refer to "Non- (in millions, except per share data)
| ||||
Reconciliation of | ||||
Three months ended | Proprietary | CM | Eliminations | Total |
Reported net sales ( | $” | |||
Effect of changes in currency translation rates | 5.4 | 0.7 | ” | 6.1 |
Organic net sales (Non- | $” | |||
Six months ended | Proprietary | CM | Eliminations | Total |
Reported net sales ( | $” | |||
Effect of changes in currency translation rates | 2.6 | 0.1 | ” | 2.7 |
Organic net sales (Non- | $” | |||
Three months ended | Proprietary | CM | Eliminations | Total |
Reported net sales ( | $” | |||
Effect of divestitures and/or acquisitions | (1.1) | ” | ” | (1.1) |
Net sales excluding divestiture (Non- | $” | |||
Six months ended | Proprietary | CM | Eliminations | Total |
Reported net sales ( | $” | |||
Effect of divestitures and/or acquisitions | (4.3) | ” | ” | (4.3) |
Net sales excluding divestiture (Non- | $” |
(4) | Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the U. |
(5) | Net sales excluding divestiture represents the 2023 comparative sales figure used in our organic sales growth calculation to eliminate the impact of our 2023 divestiture. |
WEST PHARMACEUTICAL SERVICES RECONCILIATION OF NON- Please refer to "Non- (in millions, except per share data) | |||
Reconciliation of Reported-Diluted EPS Guidance to Adjusted-Diluted EPS Guidance | |||
2023 Actual | 2024 Guidance | % Change | |
Reported-diluted EPS ( | (19.9%) to | ||
Loss on disposal of plant | 0.16 | ||
Cost investment activity | 0.06 | ||
Restructuring and other charges | (0.02) | ||
Amortization of acquisition-related intangible assets | 0.04 | 0.04 | |
Legal settlement | (0.04) | ||
Adjusted-diluted EPS (Non- | (21.4%) to |
Notes: | |
See "Full-year 2024 Financial Guidance" and "Non- | |
(6) | We have opted not to forecast 2024 tax benefits from stock-based compensation in upcoming quarters, as they are out of the Company's control. Instead, we recognize the benefits as they occur. In the first-half of 2024, tax benefits associated with stock-based compensation increased adjusted-diluted EPS by |
WEST PHARMACEUTICAL SERVICES CASH FLOW ITEMS (UNAUDITED) (in millions) | |||
Six Months Ended | |||
2024 | 2023 | ||
Depreciation and amortization | |||
Operating cash flow | |||
Capital expenditures | |||
Free cash flow |
WEST PHARMACEUTICAL SERVICES FINANCIAL CONDITION (UNAUDITED) (in millions) | |||
As of | As of | ||
Cash and cash equivalents | |||
Accounts receivable, net | |||
Inventories | |||
Accounts payable | |||
Debt | |||
Equity | |||
Working capital |
Trademark Notices
Trademarks and registered trademarks are the property of West Pharmaceutical Services, Inc., in
Daikyo Crystal Zenith ® and Daikyo CZ ® are registered trademarks of Daikyo Seiko, Ltd. Daikyo Crystal Zenith technologies are licensed from Daikyo Seiko, Ltd.
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