AptarGroup, Inc. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. AptarGroup, Inc. is a global manufacturer of dispensing, dosing, and protection technologies for the pharmaceutical, beauty, and food/beverage markets. The company operates through three reportable segments: Pharma, Beauty, and Closures.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Sales | $982.9 million | $887.3 million |
| Operating Income | $107.5 million | $113.4 million |
| Net Income (Attributable to Aptar) | $72.7 million | $78.8 million |
| Diluted EPS | $1.12 | $1.17 |
| Adjusted EBITDA | $188.9 million | $183.3 million |
| Free Cash Flow | $53.3 million | $25.9 million |
| Cash and Equivalents | $222.5 million | $125.8 million |
| Total Debt | $1.37 billion | $1.48 billion |
| Net Debt to Net Capital | 30.0% | 28.6% |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 11% year-over-year, driven by an 8% positive impact from foreign currency exchange rates and 3% from acquisitions. Core sales (excluding currency and acquisitions) were flat.
- Profitability: Operating income decreased 5% to $107.5 million. Operating margin declined to 10.9% from 12.8%, primarily due to lower sales of higher-margin emergency medicine products in the Pharma segment, lower tooling margins, and increased depreciation costs.
- Segment Performance:
- Pharma: Sales up 7%; Adjusted EBITDA up 3% to $146.2 million. Growth in Injectables (+20% core) and Consumer Healthcare (+4% core) offset a 10% decline in Prescription Drug core sales.
- Beauty: Sales up 19%; Adjusted EBITDA up 9% to $40.5 million. Driven by strong demand in Fragrance & Facial Skincare.
- Closures: Sales up 5%; Adjusted EBITDA down 13% to $23.7 million due to operational issues and a $0.9 million equity investment write-off.
- Debt Reduction: Total debt decreased by approximately $117 million, largely due to the full repayment of $125.0 million in 3.60% Senior Notes due in February 2026.
- Share Repurchases: The company repurchased approximately 707,000 shares for $100.0 million under a new $600.0 million authorization announced in February 2026.
Guidance, Outlook, and Risks
- Q2 2026 Guidance: Management expects Adjusted EPS in the range of $1.32 to $1.40. This assumes an effective tax rate of 22.5% to 24.5% and a Euro/USD exchange rate of 1.18.
- Capital Expenditures: Total 2026 estimated cash outlays for CapEx are expected to be $310.0 million to $320.0 million (net of government grants).
- Legal Proceedings:
- ARS Pharmaceuticals: Aptar is litigating trade secret misappropriation claims; ARS has filed a counter-suit alleging antitrust violations. No final determination has been made.
- Nemera La Verpillière: Patent infringement actions in Germany and France regarding ophthalmic products are ongoing, with trials scheduled for mid-2026 and early 2027.
- Tariff Contingency: Following a U.S. Supreme Court ruling invalidating certain tariffs, the company is evaluating potential refunds for previously paid duties but has not recorded a benefit due to uncertainty regarding timing and mechanics.
Investor Verification Checklist
- Verify the sustainability of core sales growth given the flat organic performance in Q1.
- Monitor the resolution of the Nemera patent litigation and its potential impact on the Pharma segment's ophthalmic product line.
- Assess the impact of rising interest rates on future debt service costs, given the recent refinancing activities.
- Review the timeline and probability of recovering previously paid IEEPA-based tariffs.
- Track the integration and performance of recent acquisitions contributing to the 3% sales growth.