APTARGROUP INC - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-11846

AptarGroup, Inc.


DELAWARE (State of Incorporation)		36-3853103 (I.R.S. Employer Identification No.)

475 WEST TERRA COTTA AVENUE, SUITE E, CRYSTAL LAKE, ILLINOIS 60014

815-477-0424

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date (April 23, 2005).


Common Stock			35,492,956

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

AptarGroup, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

In thousands, except per share amounts


Three Months Ended March 31,	2005			2004

Net Sales	$	343,999		$	315,603

Operating Expenses:
Cost of sales (exclusive of depreciation shown below)		232,478			211,581
Selling, research & development and administrative		51,640			48,269
Depreciation and amortization		25,532			24,050

		309,650			283,900

Operating Income		34,349			31,703


Other Income (Expense):
Interest expense		(2,738	)		(2,229	)
Interest income		815			1,018
Equity in results of affiliates		332			442
Minority interests		—			(119	)
Miscellaneous, net		(305	)		413

		(1,896	)		(475	)


Income Before Income Taxes		32,453			31,228

Provision for Income Taxes		10,385			9,993


Net Income	$	22,068		$	21,235


Net Income Per Common Share:
Basic	$	.62		$	.58

Diluted	$	.60		$	.57


Average number of shares outstanding:
Basic		35,639			36,402
Diluted		36,773			37,355

See accompanying notes to consolidated financial statements.

AptarGroup, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

In thousands, except per share amounts


	March 31,			December 31,
	2005			2004

Liabilities and Stockholders’ Equity

Current Liabilities:
Notes payable	$	73,749		$	56,428
Current maturities of long-term obligations		6,965			6,864
Accounts payable and accrued liabilities		211,431			213,569

		292,145			276,861


Long-Term Obligations		142,228			142,581


Deferred Liabilities and Other:
Deferred income taxes		44,803			45,169
Retirement and deferred compensation plans		27,089			26,673
Deferred and other non-current liabilities		2,392			2,313
Minority interests		6,994			7,232

		81,278			81,387


Stockholders’ Equity:
Common stock, $.01 par value		384			382
Capital in excess of par value		151,896			148,722
Retained earnings		712,617			695,901
Accumulated other comprehensive income		86,484			120,323
Less treasury stock at cost, 2.9 million and 2.6 million shares in 2005 and 2004, respectively		(103,356	)		(92,131	)

		848,025			873,197

Total Liabilities and Stockholders’ Equity	$	1,363,676		$	1,374,026

See accompanying notes to consolidated financial statements.

AptarGroup, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

In thousands, brackets denote cash outflows


Three Months Ended March 31,	2005			2004

Cash Flows From Operating Activities:
Net income	$	22,068		$	21,235
Adjustments to reconcile net income to net cash provided by operations:
Depreciation		24,923			23,464
Amortization		609			586
Provision for bad debts		104			332
Minority interests		—			119
Deferred income taxes		(607	)		488
Retirement and deferred compensation plans		(1,753	)		(2,121	)
Equity in results of affiliates in excess of cash distributions received		(304	)		(442	)
Changes in balance sheet items, excluding effects from foreign currency adjustments:
Accounts receivable		(19,931	)		(17,656	)
Inventories		(9,029	)		(7,173	)
Prepaid and other current assets		(1,685	)		598
Accounts payable and accrued liabilities		10,424			8,755
Income taxes payable		1,460			3,974
Other changes, net		5,562			3,648

Net Cash Provided by Operations		31,841			35,807


Cash Flows From Investing Activities:
Capital expenditures		(25,010	)		(19,467	)
Disposition of property and equipment		703			3,693
Intangible assets		(257	)		(725	)
Acquisition of business		(29,774	)		—
Collection of notes receivable, net		197			45

Net Cash Used by Investing Activities		(54,141	)		(16,454	)


Cash Flows From Financing Activities:
Proceeds from notes payable		17,374			922
Proceeds from long-term obligations		628			—
Repayments of long-term obligations		(934	)		(2,041	)
Dividends paid		(5,353	)		(2,543	)
Proceeds from stock options exercises		3,888			4,203
Purchase of treasury stock		(12,296	)		—

Net Cash Provided by Financing Activities		3,307			541


Effect of Exchange Rate Changes on Cash		(6,514	)		(3,286	)

Net (Decrease)/increase in Cash and Equivalents		(25,507	)		16,608
Cash and Equivalents at Beginning of Period		170,368			164,982

Cash and Equivalents at End of Period	$	144,861		$	181,590


Supplemental Non-cash Financing Activities:
Capital lease obligations	$	100			—

See accompanying notes to consolidated financial statements.

AptarGroup, Inc.

Notes to Consolidated Financial Statements

(Amounts in Thousands, Except per Share Amounts, or Otherwise Indicated)
(Unaudited)

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the accounts of AptarGroup, Inc. and its subsidiaries. The terms “AptarGroup” or “Company” as used herein refer to AptarGroup, Inc. and its subsidiaries.

In the opinion of management, the unaudited consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of consolidated financial position, results of operations, and cash flows for the interim periods presented. The accompanying unaudited consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. Accordingly, these unaudited consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. The results of operations of any interim period are not necessarily indicative of the results that may be expected for the year.

At March 31, 2005 and March 31, 2004, the Company had stock-based employee compensation plans. The Company accounts for those plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. No stock option-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation.


Three Months Ended March 31,			2005			2004

Net income, as reported			$	22,068		$	21,235
Deduct:		Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(1,276	)		(846	)

Pro forma net income			$	20,792		$	20,389


Earnings per share:
	Basic — as reported		$	.62		$	.58

	Basic — pro forma		$	.58		$	.56

	Diluted — as reported		$	.60		$	.57

	Diluted — pro forma		$	.57		$	.55

NOTE 2 — INVENTORIES

At March 31, 2005 and December 31, 2004, approximately 22% of the total inventories are accounted for by using the LIFO method. Inventories, by component, consisted of:


	March 31,			December 31,
	2005			2004

Raw materials	$	68,976		$	62,785
Work-in-process		43,781			47,130
Finished goods		82,235			82,263

Total		194,992			192,178
Less LIFO Reserve		(3,129	)		(2,829	)

Total	$	191,863		$	189,349

NOTE 3 — GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill since the year ended December 31, 2004 are as follows by reporting segment:


	Dispensing Systems			SeaquistPerfect
	Segment			Segment			Total

Balance as of December 31, 2004	$	138,379		$	1,860		$	140,239
Acquisitions (See Note 11)					11,087			11,087
Foreign currency exchange effects		(1,927	)		(236	)		(2,163	)

Balance as of March 31, 2005	$	136,452		$	12,711		$	149,163

The table below shows a summary of intangible assets as of March 31, 2005 and December 31, 2004.


			March 31, 2005							December 31, 2004

	Weighted Average		Gross							Gross
	Amortization		Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Period (Years)		Amount		Amortization			Value		Amount		Amortization			Value

Amortized intangible assets:
Patents		15	$	16,113	$	(7,210	)	$	8,903	$	17,852	$	(8,259	)	$	9,593
License agreements and other		6		9,190		(5,427	)		3,763		9,093		(5,258	)		3,835

		12		25,303		(12,637	)		12,666		26,945		(13,517	)		13,428

Unamortized intangible assets:
Trademarks				483		—			483		505		—			505
Pension asset				520		—			520		539		—			539

				1,003		—			1,003		1,044		—			1,044

Total intangible assets			$	26,306	$	(12,637	)	$	13,669	$	27,989	$	(13,517	)	$	14,472

Aggregate amortization expense for the intangible assets above for the quarters ended March 31, 2005 and 2004 was $609 and $586, respectively.

Estimated amortization expense for the years ending December 31 is as follows:


2005	$	2,306
2006		1,964
2007		1,937
2008		1,891
2009		1,651

Future amortization expense may fluctuate depending on changes in foreign currency rates. The estimates for amortization expense noted above are based upon foreign exchange rates as of March 31, 2005.

NOTE 4 — COMPREHENSIVE INCOME/(LOSS)

AptarGroup’s total comprehensive income/(loss) was as follows:

Three Months Ended March 31,


	2005			2004

Net income	$	22,068		$	21,235
Foreign currency translation adjustments		(33,838	)		(15,197	)

Total comprehensive (loss)/income	$	(11,770	)	$	6,038

NOTE 5 — RETIREMENT AND DEFERRED COMPENSATION PLANS

Components of Net Periodic Benefit Cost:

Three months ended March 31,


	Domestic Plans						Foreign Plans
	2005			2004			2005			2004

Service cost	$	993		$	853		$	260		$	227
Interest cost		628			548			347			321
Expected return on plan assets		(604	)		(603	)		(117	)		(94	)
Amortization of prior service cost		1			6			26			25
Amortization of net loss		126			73			73			58

Net periodic benefit cost	$	1,144		$	877		$	589		$	537

EMPLOYER CONTRIBUTIONS

The Company previously disclosed in its financial statements for the year ended December 31, 2004, that it expected to contribute approximately $1.3 million to its domestic defined benefit plans and approximately $1.3 million to its foreign defined benefit plans in 2005. As of March 31, 2005, the Company has contributed approximately $.2 million to its foreign plans and has not yet contributed to its domestic plans. The Company presently anticipates contributing an additional $1.1 million to fund its foreign plans and anticipates contributing approximately $1.3 million to its domestic plans in the remainder of 2005.

NOTE 6 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company maintains a foreign exchange risk management policy designed to establish a framework to protect the value of the Company’s non-functional denominated transactions from adverse changes in exchange rates. Sales of the Company’s products can be denominated in a currency different from the currency in which the related costs to produce the product are denominated. Changes in exchange rates on such inter-country sales impact the Company’s results of operations. The Company’s policy is not to engage in speculative foreign currency hedging activities, but to minimize its net foreign currency transaction exposure defined as firm commitments and transactions recorded and denominated in currencies other than the functional currency. The Company may use foreign currency forward exchange contracts, options and cross currency swaps to hedge these risks.

The Company maintains an interest rate risk management strategy to minimize significant, unanticipated earnings fluctuations that may arise from volatility in interest rates.

For derivative instruments designated as hedges, the Company formally documents the nature and relationships between the hedging instruments and the hedged items, as well as the risk management objectives, strategies for undertaking the various hedge transactions, and the method of assessing hedge effectiveness. Additionally, in order to designate any derivative instrument as a hedge of an anticipated transaction, the significant characteristics and expected terms of any anticipated transaction must be specifically identified, and it must be probable that the anticipated transaction will occur.

FAIR VALUE HEDGES

The Company has an interest rate swap to convert a portion of its fixed-rate debt into variable-rate debt. Under the interest rate swap contract, the Company exchanges, at specified intervals, the difference between fixed-rate and floating-rate amounts, which are calculated based on an agreed upon notional amount.

As of March 31, 2005, the Company has recorded the fair value of derivative instruments of $2.4 million in miscellaneous other assets with an offsetting adjustment to debt related to a fixed-to-variable interest rate swap agreement with a notional principal value of $25 million. No gain or loss was recorded in the income statement in 2005 or 2004 since there was no hedge ineffectiveness.

CASH FLOW HEDGES

The Company did not use any cash flow hedges for the quarters ending March 31, 2005 or 2004.

HEDGE OF NET INVESTMENTS IN FOREIGN OPERATIONS

A significant number of the Company’s 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 the Company’s foreign entities. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on the Company’s financial condition and results of operations. Conversely, a strengthening U.S. dollar has a dilutive effect. The Company in some cases maintains debt in these subsidiaries to offset the net asset exposure. The Company does not otherwise actively manage this risk using derivative financial instruments. In the event the Company plans on a full or partial liquidation of any of its foreign subsidiaries where the Company’s net investment is likely to be monetized, the Company will consider hedging the currency exposure associated with such a transaction.

OTHER

As of March 31, 2005, the Company has recorded the fair value of foreign currency forward exchange contracts of $252 thousand in prepayments and other in the balance sheet. All forward exchange contracts outstanding as of March 31, 2005 had an aggregate contract amount of $57.3 million.

NOTE 7 — COMMITMENTS AND CONTINGENCIES

The Company started construction of a new 90,000 square foot manufacturing facility in Italy to be used to manufacture spray through overcaps and aerosol valve accessories. The factory is estimated to cost approximately $9 million and will be financed through internally generated cash.

The Company, in the normal course of business, is subject to a number of lawsuits and claims both actual and potential in nature. Management believes the resolution of these claims and lawsuits will not have a material adverse effect on the Company’s financial position, results of operations or cash flow.

Under its Certificate of Incorporation, the Company has agreed to indemnify its officers and directors for certain events or occurrences while the officer or director is, or was serving, at its request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a directors and officers liability insurance policy that covers a portion of its exposure. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. The Company has no liabilities recorded for these agreements as of March 31, 2005.

NOTE 8 — STOCK REPURCHASE PROGRAM

During the quarter ended March 31, 2005, the Company repurchased 242 thousand shares for an aggregate amount of $12.3 million. As of March 31, 2005, the Company has outstanding authorizations to repurchase up to approximately 2.1 million shares. The timing of and total amount expended for the share repurchase depends upon market conditions.

NOTE 9 — EARNINGS PER SHARE

AptarGroup’s authorized common stock consisted of 99 million shares, having a par value of $0.01 each. Information related to the calculation of earnings per share is as follows:


			Three months ended
	March 31, 2005				March 31, 2004
	Diluted		Basic		Diluted		Basic

Consolidated operations
Income available to common shareholders	$	22,068	$	22,068	$	21,235	$	21,235


Average equivalent shares
Shares of common stock		35,639		35,639		36,402		36,402
Effect of dilutive stock based compensation
Stock options		1,129		—		944		—
Restricted stock		5		—		9		—

Total average equivalent shares		36,773		35,639		37,355		36,402

Net income per share	$	.60	$	.62	$	0.57	$	0.58

NOTE 10 — SEGMENT INFORMATION

The Company operates in the packaging components industry, which includes the development, manufacture and sale of consumer product dispensing systems. The Company is organized primarily based upon individual business units, which resulted from historic acquisitions or internally created business units. All of the business units sell primarily dispensing systems. These business units all require similar production processes, sell to similar classes of customers and markets, use the same methods to distribute products and operate in similar regulatory environments. Based on the current economic characteristics of the Company’s business units, the Company has identified two reportable segments: Dispensing Systems and SeaquistPerfect.

The Dispensing Systems segment is an aggregate of four of the Company’s five business units. The Dispensing Systems segment sells primarily non-aerosol spray and lotion pumps, plastic dispensing and non-dispensing closures, and metered dose aerosol valves. These three products are sold to all of the markets served by the Company including the fragrance/cosmetic, pharmaceutical, personal care, household, and food/beverage markets.

SeaquistPerfect represents the Company’s fifth business unit and sells primarily aerosol valves and accessories and certain non-aerosol spray and lotion pumps. These products are sold primarily to the personal care, household, and food/beverage markets.

The accounting policies of the segments are the same as those described in Note 1, Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. The Company evaluates performance of its business units and allocates resources based upon earnings before interest expense in excess of interest income, corporate expenses, income taxes and unusual items (collectively referred to as “Segment Income”). The Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties.

Financial information regarding the Company’s reportable segments is shown below:


					Corporate
Three months ended March 31,	Dispensing Systems		SeaquistPerfect		and Other			Totals

Total Revenue
2005	$	281,316	$	65,458	$	—		$	346,774
2004		262,235		55,761		—			317,996

Less: Intersegment Sales
2005	$	658	$	2,117	$	—		$	2,775
2004		785		1,608		—			2,393

Net Sales
2005	$	280,658	$	63,341	$	—		$	343,999
2004		261,450		54,153		—			315,603

Segment Income
2005	$	32,127	$	6,744	$	(4,495	)	$	34,376
2004		31,297		5,292		(4,150	)		32,439

Reconciliation of Segment Income to consolidated income before income taxes is as follows:


Three months ended March 31,	2005			2004

Total Segment Income for reportable segments	$	34,376		$	32,439
Interest expense, net		(1,923	)		(1,211	)

Income before income taxes	$	32,453		$	31,228

NOTE 11 — ACQUISITIONS

During the first quarter of 2005, the Company acquired 100% of voting equity interest of EP Spray System SA for approximately $30 million in cash. No debt was assumed in the transaction. EP Spray System SA is a Swiss company that manufactures aerosol valves with bag-on-valve technology. This technology expands the Company’s aerosol valve product offerings. The Company is in the process of completing a fair market valuation of the assets and liabilities of EP Spray Systems SA and as of the date of this report, that information was not yet available. As a result, the full amount of the excess of the purchase price over the net book value of EP Spray Systems SA (approximately $11 million) was assigned to goodwill as of March 31, 2005.

ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

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

RESULTS OF OPERATIONS


Quarter Ended March 31,	2005			2004


Net Sales		100.0	%		100.0	%
Cost of sales (exclusive of depreciation shown below)		67.6			67.0
Selling, research & development and administration		15.0			15.3
Depreciation and amortization		7.4			7.6

Operating Income		10.0			10.1
Other income (expense)		(0.6	)		(0.2	)

Income before income taxes		9.4			9.9


Net income		6.4	%		6.7	%


Effective Tax Rate		32.0	%		32.0	%

NET SALES

We recorded net sales of $344.0 million for the quarter ended March 31, 2005, or nine percent above first quarter 2004 net sales of $315.6 million. Although the U.S. dollar strengthened slightly in the first quarter from December 31, 2004 it remained approximately five percent weaker compared to the Euro in the first quarter of last year. Net sales excluding changes in foreign currency rates increased approximately six percent compared to the first quarter in the prior year. Sales of custom tooling decreased approximately $8 million compared to the first quarter of 2004. Last year’s first quarter sales included approximately $7 million in custom tooling sales related to a large pharmaceutical project that was canceled during that quarter. Certain raw material cost increases passed along to customers and a general overall price increase had a positive effect on net sales in the quarter, helping to offset rising raw material costs. Excluding changes in foreign currency rates, the changes in sales by market were as follows:

•	Sales of our products to the personal care market increased approximately 13% in the first quarter of 2005 compared to the first quarter of 2004 primarily due to an increase in unit sales to this market of all the products we produce. Sales of aerosol valves to the personal care market increased primarily due to the successful introduction of new valve accessories such as a turning/locking actuator as well as the acquisition of a company in Switzerland that has proprietary valve technology. Demand for our dispensing closures was strong in the first quarter of 2005, particularly in the U.S., leading to record unit shipments.
•	Sales of our products to the fragrance/cosmetic market increased approximately four percent in the first quarter of 2005 compared to the first quarter of 2004 reflecting new customer product launches particularly in the high-end of the market. Price competition continues to impact this market, particularly the low-end sector.
•	Sales of our products to the pharmaceutical market decreased approximately seven percent in the first quarter of 2005 compared to the first quarter of 2004. Excluding the decrease in sales of custom tooling discussed above, sales of pharmaceutical products increased approximately two percent in the quarter.
•	Sales of our products to the food/beverage markets increased approximately 21% in the first quarter of 2005 compared to the first quarter of 2004, reflecting increased sales of our dispensing closures, due primarily to the continued conversion from glass containers to plastic which allows the packages to be squeezed as well as the increased use of our inverted dispensing closure product range in this market.
•	Sales of our products to the household market increased approximately 10% in the first quarter of 2005 compared to the first quarter of 2004 primarily due to an increase in metered dose aerosol valve sales to this market.

The following table sets forth, for the periods indicated, net sales by geographic location:


Quarter Ended March 31,	2005		% of Total		2004		% of Total

Domestic	$	102,166		30%	$	90,449		29%
Europe		210,192		61%		199,719		63%
Other Foreign		31,641		9%		25,435		8%

COST OF SALES (EXCLUSIVE OF DEPRECIATION SHOWN BELOW)

Our cost of sales as a percent of net sales increased to 67.6% in the first quarter of 2005 compared to 67.0% in the same period a year ago. Our cost of sales percentage was negatively influenced by the following factors in 2005:

Rising Raw Material Costs. Raw material costs, in particular plastic resin costs, continued to increase in the first quarter of 2005. While some of this raw material price increase has been passed on to customers in the form of selling price increases, the net effect is a reduction in the margin percentage.

Strengthening of the Euro. We are a net importer from Europe of products produced in Europe with costs denominated in Euros. As a result, when the Euro strengthens against the U.S. dollar or other currencies, products produced in Europe (with costs denominated in Euros) and sold in currencies that are weaker compared to the Euro, have a negative impact on cost of sales as a percentage of net sales.

Weakness in Pharmaceutical Product Sales. The majority of the increase in product sales in the first quarter of 2005 came from product lines other than the pharmaceutical product line which typically carries higher margins than the other markets we serve. As a result, the mix of products sold had a negative impact on the cost of sales as percentage of net sales.

Sale of Building in 2004. In the first quarter of 2004, we sold a production facility and realized a gain on the sale of the building of approximately $1 million. This gain positively impacted cost of goods sold in 2004 and did not repeat in 2005.

Partially offsetting these negative factors were the following positive factors in 2005:

Decreased Sales of Custom Tooling. We saw approximately an $8 million decrease in sales of custom tooling in the first quarter of 2005. Traditionally sales of custom tooling generates lower margins than our regular product sales and thus the decreased sales of custom tooling in the first quarter of 2005 compared to the prior year positively impacted cost of sales as a percentage of sales in the first quarter of 2005.

Operating Losses and Shut Down Expenses for a Mold Manufacturing Facility in the U.S. We made the decision in the first quarter of 2004 to close a mold manufacturing facility in the U.S. Due to a reduction in the volume of business in the first quarter of 2004, this facility lost approximately $600 thousand. In addition, approximately $500 thousand of shut down and related severance charges were recorded relating to approximately 40 people and were included in cost of goods sold during the first quarter of 2004. These costs were not present in the first quarter of 2005.

SELLING, RESEARCH & DEVELOPMENT AND ADMINISTRATIVE

Our Selling, Research & Development and Administrative expenses (“SG&A”) increased by approximately $3.4 million in the first quarter of 2005 compared to the same period a year ago. Approximately $1.6 million of the increase is due to movement in exchange rates. We had approximately $.7 million more expenses related to professional fees and $.6 million higher research and development patent and prototype tooling costs in the first quarter of 2005 compared to the first quarter of 2004. The remainder of the increase is due to normal inflationary cost and wage increases.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization increased approximately $1.5 million in the first quarter of 2005 to $25.5 million compared to $24.1 million in the first quarter of 2004. Approximately $.8 million of the increase is due to the stronger Euro compared to the U.S. dollar in 2005. The remaining increase relates to increased capital expenditures to support the growth of our business.

OPERATING INCOME

Operating income increased approximately $2.7 million in the first quarter of 2005 to $34.4 million compared to $31.7 million in the same period in the prior year. The increase is primarily due to the increase in sales volume noted above. Operating income as percentage of net sales remained constant at approximately 10% for both the first quarter of 2005 and 2004.

NET OTHER EXPENSE

Net other expenses in the first quarter of 2005 increased to $1.9 million from $.5 million in the same period in the prior year primarily reflecting increased interest expense of $.5 million, decreased interest income of $.2 million and an increase in foreign exchange losses of approximately $.7 million. The increase in interest expense is due to higher borrowings as a result of our share repurchases and higher average interest rates. The reduction in interest income is due primarily to our lower cash position between the two periods as a result of the acquisition completed in the first quarter of 2005 and the repatriation of funds from Europe to the U.S. in the third quarter of 2004. The increase in foreign exchange losses is the result of the strengthening of the U.S. dollar compared to the Euro from December 2004 and the related decrease in fair value of our open forward exchange contracts from year end.

EFFECTIVE TAX RATE

The reported effective tax rate remained constant at 32% for the three months ended March 31, 2005 and 2004. As we have indicated previously, we have filed for U.S. federal tax refunds relating to research and development expenditures incurred from 2000 to 2002. We are in the process of finalizing this matter with the internal revenue service and presently expect the tax benefit to be approximately $1.2 million. Also, the Italian government has offered an incentive relating to taxation of previously received investment grants. We had previously provided for deferred taxes on these investment grants when they were received. If we elect to accept the Italian government’s incentive to pay a reduced amount of tax on these previously received investment grants, we estimate the effect would be a reduction in income tax expense of approximately $2.1 million. Neither of these tax issues have been reflected in the financial statements, therefore the settlement of these two tax issues will significantly reduce the effective tax rate in the period when they occur.

NET INCOME

We reported net income of $22.1 million in the first quarter of 2005 compared to $21.2 million in the first quarter of 2004.

DISPENSING SYSTEMS SEGMENT

The Dispensing Systems segment is an aggregate of four of our five business units. The Dispensing Systems segment sells primarily non-aerosol spray and lotion pumps, plastic dispensing closures, and metered dose aerosol valves. These three products are sold to all the markets we serve.


Three Months Ended March 31,	2005		2004

Net Sales	$	280,658	$	261,450
Segment Income (1)		32,127		31,297
Segment Income as a percentage of Net Sales		11.4%		12.0%

(1) Segment Income is defined as earnings before net interest, corporate expenses, income taxes and unusual items. The Company evaluates performance of its business units and allocates resources based upon Segment Income. For a reconciliation of Segment Income to income before income taxes, see Note 10 — Segment information to the Consolidated Financial Statements in Item 1.

Our net sales for the Dispensing Systems segment grew by more than seven percent in the first quarter of 2005 over the first quarter of 2004. The strengthening Euro helped contribute to the sales increase. Net sales excluding changes in foreign currency exchange rates increased approximately four percent from the prior year. Sales increased to the personal care, food/beverage and household markets, offsetting the decrease in the pharmaceutical market due to the reduction in sales of custom tooling.

Segment Income in the first quarter of 2005 increased approximately three percent to $32.1 million compared to $31.3 million reported in the same period in the prior year but decreased as a percentage of net sales. The decrease as a percentage of net sales is primarily due to the stronger Euro in the first quarter of 2005 compared to the first quarter of 2004 as well as the mix of products sold by market field discussed previously above.

SEAQUISTPERFECT SEGMENT

SeaquistPerfect represents our fifth business unit and sells primarily aerosol valves and accessories and certain non-aerosol spray and lotion pumps. These products are sold primarily to the personal care, household, and food/beverage markets.


Three Months Ended March 31,	2005		2004

Net Sales	$	63,341	$	54,153
Segment Income		6,744		5,292
Segment Income as a percentage of Net Sales		10.6%		9.8%

Net sales for the quarter ended March 31, 2005 increased 17% over the first quarter of the prior year. Net sales excluding changes in foreign currency exchange rates increased approximately 14% or $8 million from the prior year, reflecting additional sales of approximately $2 million from the acquisition of the bag-on-valve company in Switzerland during the first quarter of 2005. The remainder of the increase in sales is due to the successful introduction of new aerosol valve accessories for the personal care market and an increase in metered dose aerosol valves to the household market.

Segment Income in the first quarter of 2005 increased approximately 27% to $6.7 million compared to $5.3 million reported in the same period in the prior year. Segment Income increased primarily due to the acquisition mentioned above and the increase in sales volumes which led to better utilization of fixed costs.

FOREIGN CURRENCY

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 statements of our foreign entities. Our primary foreign exchange exposure is to the Euro, but we have foreign exchange exposure to South American and Asian currencies, among others. We manage our foreign exchange exposures principally with forward exchange contracts to hedge certain transactions and firm purchase and sales commitments denominated in foreign 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. In some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Changes in exchange rates on such inter-country sales could materially impact our results of operations.

QUARTERLY TRENDS

Our results of operations in the second half of the year typically are negatively impacted by customer plant shutdowns in the summer months in Europe and plant shutdowns in December. In the future, our results of operations in a quarterly period could be impacted by factors such as changes in product mix, changes in material costs, changes in growth rates in the industries to which our products are sold, and changes in general economic conditions in any of the countries in which we do business.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash flow from operations and our revolving credit facility. Cash and equivalents decreased to $144.9 million from $170.4 million at December 31, 2004. Total short and long-term interest bearing debt increased in the first quarter of 2005 to $222.9 million from $205.9 million at December 31, 2004. The ratio of Net Debt (interest bearing debt less cash and cash equivalents) to Net Capital (stockholder’s equity plus Net Debt) increased to approximately 8% compared to 4% as of December 31, 2004.

In the first quarter of 2005, our operations provided approximately $31.8 million in cash flow compared to $35.8 million for the same period a year ago. In both periods, cash flow from operations was primarily derived from earnings before depreciation and amortization. The decrease in cash flow is primarily attributable to an increase in working capital needs to support the growth in the business. During the first quarter of 2005, we utilized the majority of the operating cash flows to finance capital expenditures.

We used $54.1 million in cash for investing activities during the first quarter of 2005, compared to $16.5 million during the same period a year ago. The increase in cash used for investing activities is due primarily to the acquisition of a bag-on-valve company in Switzerland as well as increased capital expenditures during the quarter. The acquisition of the company in Switzerland was paid for using existing cash in Europe. Cash outlays for capital expenditures for 2005 are estimated to be approximately $100 million.

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


	Requirement	Level at March 31, 2005
Interest coverage ratio	At least 3.5 to 1	23 to 1
Debt to total capital ratio	55%	21%

Based upon the above interest coverage ratio covenant, we could borrow additional debt up to a limit where interest expense would not exceed approximately $70 million. Actual interest expense for the past four quarters was approximately $11 million. Based upon the above debt to capital ratio covenant we would have the ability to borrow an additional $810 million before the 55% requirement would be exceeded.

Our foreign operations have historically met cash requirements with the use of internally generated cash or borrowings. Foreign subsidiaries have financing arrangements with several foreign banks to fund operations located outside the U.S., but all these lines are uncommitted. Cash generated by foreign operations has generally been reinvested locally. The majority of our $144.9 million in cash and equivalents is located outside of the U.S. In 2004, we decided to repatriate a portion (approximately $30 million) of non-U.S. subsidiary 2004 earnings, and we expect the funds to be distributed in the second quarter of 2005. We provided for additional taxes of approximately $.4 million in 2004 for this repatriation.

We believe we are in a strong financial position and have the financial resources to meet business requirements in the foreseeable future. We have historically used cash flow from operations as our primary source of liquidity. In the event that customer demand would decrease significantly for a prolonged period of time and negatively impact cash flow from operations, we would have the ability to restrict and significantly reduce capital expenditure levels, which historically have been the most significant use of cash for us. 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.

The Board of Directors declared a quarterly dividend of $.15 per share payable on May 20, 2005 to stockholders of record as of April 29, 2005.

OFF-BALANCE SHEET ARRANGEMENTS

We lease certain warehouse, plant and office facilities as well as certain equipment under noncancelable operating leases expiring at various dates through the year 2018. Most of the operating leases contain renewal options and certain equipment leases include options to purchase during or at the end of the lease term. We have an option on one building lease to purchase the building during or at the end of the term of the lease at approximately the amount expended by the lessor for the purchase of the building and improvements, which was the fair value of the facility at the inception of the lease. This lease has been accounted for as an operating lease. If the Company exercises its option to purchase the building, the Company would account for this transaction as a capital expenditure. If the Company does not exercise the purchase option by the end of the lease in 2006, the Company would be required to pay an amount not to exceed $9.5 million and would receive certain rights to the proceeds from the sale of the related property. The value of the rights to be obtained relating to this property is expected to exceed the amount paid if the purchase option is not exercised. Other than operating lease obligations, we do not have any off-balance sheet arrangements.

ADOPTION OF ACCOUNTING STANDARDS

In November 2004, the Financial Accounting Standards Board, (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 151 “Inventory Costs.” SFAS No. 151 amends the guidance in Accounting Research Bulletin (“ARB”) No. 43, Chapter 4, “Inventory Pricing,” to clarify the abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB No. 43, Chapter 4 previously stated that “...under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges...” SFAS No. 151 requires that those items be recognized as current period charges regardless of whether they meet the criterion of “so abnormal.” In addition, SFAS No. 151 requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. We have performed a preliminary assessment and have determined that this statement will not have a material impact on us upon adoption.

In December 2004, the FASB issued SFAS No. 123R “Share-Based Payment.” SFAS No. 123R is a revision of SFAS No. 123 “Accounting for Stock-Based Compensation.” This Statement supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. This Statement requires a public company to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award; the requisite service period (usually the vesting period). SFAS No. 123R is effective as of the first annual reporting period that begins after June 15, 2005. We are currently in the process of evaluating which option pricing model to use when we implement SFAS No. 123R and thus we have not completed the estimate of the impact that this Statement will have on our financial results of operations. However, see Note 1 to the Consolidated Financial Statements in Item 8 for the effect on net income and earnings per share if we had applied the fair value recognition provisions of SFAS No. 123 using the Black-Scholes option-pricing model.

In December 2004, the FASB issued FASB Staff Position (“FSP”) No. FAS 109-1 “Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004 (the “Act”).” This FSP was issued in response to tax deductions for certain qualified production activities provided by the Act, which was signed into law by the President of the United States on October 22, 2004. As a result of the Act, this FSP concludes that those deductions included in the Act should be accounted for as a special deduction in accordance with SFAS No. 109. This FSP is effective immediately. The Act provides a deduction for income from qualified domestic production activities, which will be phased-in from 2005 through 2010. In return, the Act provides for a two-year phase-out of the existing extra-territorial income exclusion (“ETI”) for foreign sales. We expect the net effect of the phase in of this new deduction and the phase-out of the ETI to not be significant based on current earnings levels. The special deduction treatment per this FSP has no effect on deferred tax assets and liabilities existing at the enactment date. Rather, the impact of this deduction will be reported in the period in which the deduction is claimed on our tax return.

In December 2004, the FASB issued FSP No. FAS 109-2, “Accounting and Disclosure Guidelines for the Foreign Repatriation Provisions within the American Jobs Creation Act of 2004.” This FSP was issued in response to another provision of the Act that provides for temporary incentive for U.S. companies to repatriate accumulated income earned abroad and is effective immediately. This temporary incentive provides an 85% dividends received deduction for certain dividends from controlled foreign corporations. The deduction is subject to a number of limitations and as of today, significant uncertainty remains as to how to interpret numerous provisions of the Act. As such, we are not yet in a position to decide to what extent we might elect to use the repatriation provisions of the Act related to our foreign earnings. Because the majority of the Company’s foreign earnings are in higher-taxed countries, the benefits provided by the repatriation provision of the Act are, for the most part, benefits the Company was already receiving prior to the Act. Because of this, the repatriation provisions of the Act do not provide significant benefits to the Company.

OUTLOOK

The positive momentum we experienced in the first quarter is expected to continue into the second quarter. We anticipate demand to remain strong from the personal care and food/beverage markets. We are also optimistic that the pharmaceutical volumes should start to increase over the first quarter levels.

Rising raw material costs, in particular plastic resin costs, are expected to continue into the second quarter. This may have a negative impact on the anticipated results if delays or difficulties are encountered in passing through these additional costs to customers.

We have filed for U.S. federal tax refunds relating to research and development expenditures incurred from 2000 to 2002. We are in the process of finalizing this matter and presently expect the tax benefit to be approximately $1.2 million. In addition, the Italian government has offered an incentive relating to taxation of previously received investment grants. We had previously provided for deferred taxes on these investment grants when they were received. If we elect to accept the Italian government’s incentive to pay a reduced amount of tax on these previously received investment grants, we estimate the effect would be a reduction in income tax expense of approximately $2.1 million. The successful resolution of these two tax-related items would have a positive impact on diluted earnings per share of approximately $.09 per share.

Excluding any impact from the pending tax-related items noted above, we anticipate that diluted earnings per share for the second quarter of 2005 will be in the range of $.68 to $.73 per share compared to $.61 per share in the same period in the prior year.

FORWARD-LOOKING STATEMENTS

This Management’s Discussion and Analysis and certain other sections of this Form 10-K contain forward-looking statements that involve a number of risks and uncertainties. Words such as “expects,” “anticipates,” “believes,” “estimates,” 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 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:

	•	difficulties in product development and uncertainties related to the timing or outcome of product development;
	•	the cost and availability of raw materials;
	•	our ability to increase prices;
	•	our ability to contain costs and improve productivity;
	•	our ability to meet future cash flow estimates to support our goodwill impairment testing;
	•	direct or indirect consequences of acts of war or terrorism;
	•	difficulties in complying with government regulation;
	•	competition (particularly from Asia) and technological change;
	•	our ability to defend our intellectual property rights;
	•	the timing and magnitude of capital expenditures;
	•	our ability to identify potential acquisitions and to successfully acquire and integrate such operations or products;
	•	significant fluctuations in currency exchange rates;
	•	resolution of pending tax-related items:
	•	economic and market conditions worldwide;
	•	changes in customer spending levels;
	•	work stoppages due to labor disputes
	•	the demand for existing and new products;
	•	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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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.

We manage our exposures to foreign exchange principally with forward exchange contracts to hedge certain firm purchase and sales commitments and intercompany cash transactions denominated in foreign currencies.

The table below provides information as of March 31, 2005 about our forward currency exchange contracts. All the contracts expire before the end of the first quarter of 2006.


	Contract Amount		Average Contractual
Buy/Sell	(in thousands)		Exchange Rate

Euro/U.S. Dollar	$	25,095		1.2968
Swiss Francs/Euro		10,887		.6444
Canadian Dollars/Euro		5,737		.6236
Euro/Russian Ruble		2,851		36.0700
Euro/British Pounds		2,743		.7041
Euro/Indoneisan Rupiah		2,021		12,196.9679
U.S. Dollar/ Mexican Peso		1,930		11.0705
U.S. Dollar/Euro		1,405		.7622
Euro/Japanese Yen		1,165		131.0477
Other		3,451

Total	$	57,285

As of March 31, 2005, we have recorded the fair value of foreign currency forward exchange contracts of $252 thousand in prepayments and other in the balance sheet.

At March 31, 2005, we had a fixed-to-variable interest rate swap agreement with a notional principal value of $25 million which requires us to pay an average variable interest rate (which was 2.5% at March 31, 2005) and receive a fixed rate of 6.6%. The variable rate is adjusted semiannually based on London Interbank Offered Rates (“LIBOR”). Variations in market interest rates would produce changes in our net income. If interest rates increase by 100 basis points, net income related to the interest rate swap agreement would decrease by less than $.2 million assuming a tax rate of 32%. As of March 31, 2005, we recorded the fair value of the fixed-to-variable interest rate swap agreement of $2.4 million in miscellaneous other assets with an offsetting adjustment to debt. No gain or loss was recorded in the income statement in 2005 since there was no hedge ineffectiveness.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management has evaluated, with the participation of the chief executive officer and chief financial officer of the Company, the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of March 31, 2005. 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 change in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the Company’s fiscal quarter ended March 31, 2005 that materially affected, or is reasonably like to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

RECENT SALES OF UNREGISTERED SECURITIES

During the quarter ended March 31, 2005, there were no purchases or sales of our Common Stock by the FCP Aptar Savings Plan (the “Plan”) on behalf of the participants. At March 31, 2005, the Plan owns 4,240 shares of our Common Stock. The employees of AptarGroup S.A.S., and Valois S.A.S., our subsidiaries, are eligible to participate in the Plan. All eligible participants are located outside of the United States. An independent agent purchases shares of Common Stock available under the Plan for cash on the open market and the Company issues no shares. The Company does not receive any proceeds from the purchase of Common Stock under the Plan. The agent under the Plan is Banque Nationale de Paris (BNP) Paribas Asset Management. No underwriters are used under the Plan. All shares are sold in reliance upon the exemption from registration under the Securities Act of 1933 provided by Regulation S promulgated under that Act.

ISSUER PURCHASES OF EQUITY SECURITIES

The following table summarizes the Company’s purchases of its securities for quarter ended March 31, 2005:


					Total Number Of Shares		Maximum Number Of
	Total Number				Purchased As Part Of		Shares That May Yet Be
	Of Shares		Average Price		Publicly Announced		Purchased Under The
Period	Purchased		Paid Per Share		Plans Or Programs		Plans Or Programs

1/1 — 1/31/05		—	$	—		—		2,330,700
2/1 — 2/28/05		137,100		49.80		137,100		2,193,600
3/1 — 3/31/05		105,000		52.08		105,000		2,088,600
Total		242,100	$	50.79		242,100		2,088,600

On October 19, 2000, the Company announced that it was authorized to repurchase two million shares of its outstanding common stock. On July 15, 2004, the Company announced that it was authorized to repurchase an additional two million shares of its outstanding common stock bringing the cumulative total repurchase authorization to four million shares of the Company’s common stock. There is no expiration date for these repurchase programs. These repurchase programs have been approved by the Board of Directors.

ITEM 5. OTHER INFORMATION

On March 30, 2005, the Corporate Governance Committee of the Board of Directors formalized the procedures to be followed by any stockholder who wishes to submit a recommendation for a new director. Any stockholder who seeks to recommend a director for consideration by the Corporate Governance Committee must (i) include with such recommendation any information that would be required by the Company’s Bylaws if the stockholder were making the nomination directly and (ii) submit such recommendation in writing to the Company’s Secretary no less than 120 calendar days before the anniversary of the date of the Company’s proxy statement for the previous year’s annual meeting of stockholders. No other changes to procedures by which stockholders may recommend nominees to the Board of Directors were made during the quarter ended March 31, 2005.

ITEM 6. EXHIBITS


(a)		Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

		Exhibit 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

		Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

		Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Income — Three Months Ended March 31, 2005 and 2004	1

	Consolidated Balance Sheets — March 31, 2005 and December 31, 2004	2

	Consolidated Condensed Statements of Cash Flows — Three Months Ended March 31, 2005 and 2004	4

	Notes to Consolidated Financial Statements	5

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16

Item 4.	Controls and Procedures	16

Part II.	OTHER INFORMATION

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 5.	Other Information	17

Item 6.	Exhibits	17

	Signature	18
Section 302 Certification
Section 302 Certification
Section 906 Certification
Section 906 Certification


	March 31,			December 31,
	2005			2004

Assets

Current Assets:
Cash and equivalents	$	144,861		$	170,368
Accounts and notes receivable, less allowance for doubtful accounts of $9,638 in 2005 and $9,952 in 2004		274,619			266,894
Inventories		191,863			189,349
Prepayments and other		34,029			34,618

		645,372			661,229


Property, Plant and Equipment:
Buildings and improvements		194,912			196,592
Machinery and equipment		1,051,441			1,073,173

		1,246,353			1,269,765
Less: Accumulated depreciation		(735,336	)		(747,787	)

		511,017			521,978
Land		12,284			12,784

		523,301			534,762


Other Assets:
Investments in affiliates		12,284			12,409
Goodwill		149,163			140,239
Intangible assets		13,669			14,472
Miscellaneous		19,887			10,915

		195,003			178,035

Total Assets	$	1,363,676		$	1,374,026

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents


Exhibit
Number		Description

31.1		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.