(ATR) 2006 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

Welcome to AptarGroup's 2006 third quarter results conference call. [OPERATOR INSTRUCTIONS]

Introducing today's conference call is Mr. Ralph Poltermann, Vice President and Treasurer of AptarGroup.

Please go ahead, sir.

Thank you, Jolan.

Before we begin I would like to point out the discussion to follow includes some forward-looking comments and that actual results or outcomes could differ materials from those projected or contained in the forward-looking statements.

To review important factors that could cause actual result to differ materially from those projected or contained in the forward-looking statements please refer to AptarGroup's SEC filings.

The information in this conference call is relevant on the date of this live call.

Although the Company will post a replay of this conference call on its website as a service to those investors who are not able to listen today, information contained in a replay will be dated and should be used for background information only.

The Company undertakes no obligation to update material changes in forward-looking information contained therein.

Participating on this call today are Carl Siebel, President and Chief Executive Officer of AptarGroup, Peter Pfeiffer, Vice Chairman, and Steve Hagge, Executive Vice President and Chief Financial Officer.

I would now like to turn the conference over to Mr. Siebel.

Thank you, Ralph.

Good morning, ladies and gentlemen.

This is Carl Siebel.

I will briefly discuss the quarter and the outlook before turning it over to Steve Hagge, who will provide more detail information about our results.

Overall we reported an increase in sales for the quarter, and looking now at sales by segment in the beauty and home segment sales from acquisitions and increased demand from the fragrance, cosmetic and personal care markets offset lower sales for the household market, particularly of aerosol .

The Closures segment sales increased primarily due to acquisitions, resin price [inaudible] and higher sales of food and beverage market.

Pharma segment sales increased due to strong demand for our metered dose valve and also higher custom tooling sales, which were partially offset by lower pump sales.

Changes in exchange rate had a positive impact on sales during the quarter.

Operationally we had another strong quarter and reported record operating income, even after considering the negative impact of recording stock option expenses beginning this year.

We announced that we completed acquisitions of two small companies located in South America during this quarter.

The addition of Augros, which is located in Brazil, effectively extends our product offering in South America to include highly decorated accessories to the high end of fragrance and cosmetic market.

The second company which we have acquired, Engelmann, a leading closure supplier in Argentina.

Back in 2000 we acquired 35% of Engelmann and during the quarter we acquired the remaining 65% of this company.

The addition of these two businesses to our portfolio allows us to better serve our international customers as well as increase our presence in those local markets.

When comparing our results between the two years we need to consider a couple of special items.

We recorded a negative net impact from stock-option expense of $0.04 per share in the current year's quarter.

In the prior year we recorded a $0.06 share [drop] related to redeployment of personnel in our French operations that served the high-end fragrance cosmetic market.

Now looking forward, excluding changes in exchange rates, we expect sales in every segment to increase in the fourth quarter of 2006 over the prior year.

Diluted earnings per share for the fourth quarter, which includes the negative impact of $0.04 per share relating to stock-option expense I expect it to be in the range of $0.67 to $0.72 per share versus the $0.66 per share last year.

Now I would like to turn it over to Steve, who will provide more detailed information about our results.

Thanks, Carl, and good morning, everyone.

I'll review our financial highlights and then Carl, Peter and I will be happy to answer any of your questions.

First one we look at the third quarter.

Reported sales increased 19% and impact of changes in the exchange rate was a positive by about 3%.

Acquisitions accounted for 8% of the 19% increase in sales, while our sales of custom tooling increased almost $8 million in the quarter from the previous year to approximately $15 million, with the majority of this increase coming from higher sales to the fragrance, cosmetic and pharma markets.

Excluding changes in exchange rates, our beauty and home segment sales increased 22%, mainly comprised of a 32% increase in sales for the fragrance cosmetic market and an 18% increase in sales to the personal care market, while our sales in the household market declined 29%.

Again, excluding changes in exchange rate, our closure segment sales increased 14%, mainly due to a 12% increase in sales to the personal care market, a 13% increase in sales to the household market and a 9% increase in sales to the food and beverage market.

And finally, looking at our pharma segment sales, excluding exchange rate, sales increased 3%, mainly due to custom -- mainly due to sales of custom tooling.

As Carl mentioned, this year we've started recording costs related to stock options on the face of our income statement.

This negative -- this charge had a negative impact on pre-tax earnings of $2.1 million in the quarter, which was mostly reflected in our SG&A line of our income statement.

And as Carl mentioned, this represents approximately $0.04 a share on the bottom line.

In the third quarter of last year we recorded charles -- charges related to a redeployment program affecting our French fragrance cosmetic operations, a total of approximately $3 million on a pre-tax basis, $2 million on after-tax basis, or about $0.06 a share.

Bottom line, we reported earnings of $0.80 per share compared to $0.69 per share on the prior year.

From a geographic standpoint, sales to our customers by European operations represented approximately 59% of net sales this year versus 58% of sales last year, while sales to customers by our U.S. operations accounted for 30% of sales this year compared to 31% a year ago.

Free cash flow, which we define as cash flow from operations less capital expenditures, for the quarter was approximately $47 million versus $55 million in the prior year.

Our cash flow from operations for the quarter was approximately $73 million in the current year compared to $80 million in the prior year.

And our capital expenditures in the quarter were approximately $26 million compared to $25 million in 2005.

We spent approximately $22 million to repurchase roughly 426,000 shares during the quarter, at an average cost of a little over $51 per share.

The total number of shares repurchased so far this year has been 857,000.

At the end of the quarter the remaining number of shares authorized for repurchase was approximately 2.225 million The mix of debt at the end of the quarter is approximately 55% at a fixed rate and 45% at a variable rate, with the average interest rate at approximately 5.6%.

And finally our net debt to net capital is approximately 13%.

Now briefly looking at the first nine months, reported sales increased approximately 13% and the impact of changes in foreign currency rates on sales for the nine months was neutral.

Tooling sales have increased approximately $12 million from ,the prior year with the majority of this increases in sales in tooling to the fragrance cosmetic and the food and beverage markets.

Our acquisitions for the first nine months accounted for approximately $78 million, or about 7% of our increase in sales on a year-to-date basis.

As I mentioned, for the quarter we started recording the costs related to stock options in 2006.

This ch -- this change had a negative impact on our pre-tax earnings of $11.3 million on a year-to-date basis, or approximately $0.20 per share on a bottom line basis.

In the second quarter of last year, we reached an agreement with the internal revenue service regarding tax refunds we filed for, relating to research and development expenditures incurred from 2000 through 2002.

The benefit of about $1.2 million that we received in the second quarter of last year is included in the prior-year nine-months results.

Also in the second quarter of last year we accepted the Italian government's offer of reduced taxes on certain government grants, which resulted in a reduction of approximately $2 million in deferred taxes that were previously provided related to these grants.

This combined with the R&D credits I just mentioned contributed approximately $0.09 per share to our earnings per share for the nine months ended -- for the nine months in 2005.

Now looking forward, we expect our cash out lays for capital expenditures in 2006 to be similar to appreciation and amortization, and based on current exchange rates we expect this to be in the area of around $105 to $110 million.

Our affective tax rate for 2006 is expected to be in the area of 31% to 32% for the full year.

Now looking at the fourth quarter, as Carl mentioned, we expect our stock-option expense will have a negative impact on the third quarter results by approximately $0.04 per share.

Excluding this, our earnings per share growth in the quarter would be between 8% and 15% when you take the stock options out.

So at this time we'd be glad to answer any of your questions.

Thank you. [OPERATOR INSTRUCTIONS] And our first question comes from Ghansham Panjabi.

Hey, guys, good morning.

Good morning, Ghansham.

Congrats on the quarter.

Thank you.

You know, just looking at beauty and home in terms of the operating margin line, there seems to be some margin sequentially.

You know, every single business, I guess, except for household seems to have done really, really well and I'm just wondering what drove that compression?

I think it's generally the mix of the business and some of the acquisitions that we had.

So, again, I think overall we're still very comfortable Ghansham, with the overall trend in the beauty and home area.

So I don't think there's one specific item driving the market change.

What about in plastic resins, did that pressure you relative to Q2?

Again, what we're been able to do is pass that through, so you get margin percentage pressure but we've been able to pass those -- those amounts through in terms of price increases, so it hasn't really affected the bottom line but it has affected the margin percentage.

Okay, and just in terms of -- you know, some of your customers have been commenting on the disruptions related to the new travel restrictions on the airplanes.

Have you seen any impact from that?

And I guess the second part of the question is have you seen any share gains in fragrances?

Ghansham, the business has been very strong, as you have seen.

And in effect, we haven't got -- we haven't seen anything negative or haven't heard anything negative from our customers.

On the other side, you may have noticed that these travel restrictions, which were essentially between Great Britain and the United States -- but also some of those were in Europe -- but essentially between those two destinations have been relaxed.

Now people can bring small volume on the plane or the regulations allow the products which are caught -- which are bought in the duty-free store will be brought on the plane for the passenger.

We see even the potential, or two potential reasons for positive evolution of our business.

One is that, if something is confiscated, it may very well be that this passenger will have to replace it or will want to replace it after his arrival.

Yes, that's happened to me.

Yes. [LAUGHTER] And then on top of that, we believe there's quite a nice potential for our small packages.

Right now we are very successful in our sampling business, and the sampling business are really just dispensing systems of very small packages.

So people may want to use those kind of samples for the carry-on on board.

So I think right now we haven't seen anything negative.

We didn't get any customer information, customer seeing anything negative.

And so we have see what will happen going forward.

All this is very recent and we also see some upside potential.

Okay, great.

Thank you so much.

That's very helpful.

Our next question comes from Chris Manuel from KeyBanc.

Good morning, gentlemen.

Good morning, Chris.

Morning, Chris.

A couple questions for you.

First of all, can we talk a little bit more about the couple acquisitions you did?

It sounds like -- I'm not even going to try to pronounce them because I'll screw it up -- but it sounds like one is very, very similar to the MBF operation you purchased last year with decorative-type products

You hit it right on, yes

Okay.

Can you tell us -- give us some sort of sense of what -- what amount of EBITDA there was with that business that you purchased or some sort of metric like that?

So first to comment on the strategy, when we bought MBF, which happens to be a very successful acquisition and doing very well -- even better than we had expected when we bought the company -- this was in order to enhance our product offering in the high end of the market.

This MBF company essentially is operating in France and Europe, and they have certain technologies which we believe we wanted to extend to other part of the world for the same reason, extend our product offering.

Now, we had this opportunity in South America, which is a very big -- very important market for us, especially the high-end fragrance business.

And that opportunity was this company, Augros, and as you just said, this is really continuation of that strategy to enhance our offering the high end of the market worldwide.

We will be looking for the potential to bring this kind of technology and service into oth -- offer into other regions of our [inaudible].

The Engelmann acquisition is in line with our strategy of being present worldwide wherever -- in a [inaudible] situation where our customers want us to be and Engelmann, we had a minority position.

We were very successful, the business was going well and now to consolidate our presence in South American market was a good idea, but we had the opportunity to buy the 65%.

Chris, just to follow-up also a little bit.

Size-wise, the combined companies have revenues in the area of $17 to $18 million, and the purchase price, based on an EBITDA multiple, was five to six times EBITDA.

Okay, very good.

That's what I was looking for there.

Two other follow-up questions.

One, Peter, the pharma business from the sounds of the apparent comment is the organic growth was essentially flat in the quarter.

Did you have a difficult comparison, or when can we start to expect organic growth in the pharma business to begin to accelerate?

First of all, hello, Chris.

It was certainly a difficult -- difficult just to compare it to last year.

But on the other hand, you have to admit that, with our market share in this market, we are very much depending on the approvals of the FDA of new molecules.

So we are seeing for the future new molecules coming on to the market.

Recently there was the approval of two new products in the asthma area.

One is the product Advair of Glaxo, which was already on the market in the form of a powder dispenser.

Now they improved the MDI, the metered dose inhaler.

And we are seeing in the short term approval for two new molecules in the allergy market, nasal sprays, where we hope that we will see the results in the year to come in.

Okay.

So sounds like that's something that will be a next year event.

Very good.

The last question I have is with respect to your guidance for the fourth quarter.

Looks like you guys are giving out 67 to 72, and I realize that there's stock option impact in there, but refresh my memory.

In the year-ago quarter that was -- a year-ago fourth quarter there was $0.67, I thought that there was $0.05 of negative resin impact.

So I would have assumed that, if we started at that for last year, added the $0.05 back on, it just looks very, very conservative.

I'm wondering if there's any assumption of decelerating organic growth, or if there's anything unusual in the quarter or we've got in the fourth quarter.

Can you give me any more color there?

Well, I think first of all, Chris, I think when you look at if, I back out options on a year-to-year basis, we're up anywhere between 8% and 15% in terms of the earnings per share growth.

Now when we had the resin impact a year ago what we've been able to do was pass the majority of that on in terms of additional prices, so we've had not necessarily increases in profit, but [inaudible] to stabilize in terms of where the resins were.

Well, I think we have [inaudible].

Also we've been running strong in the fragrance cosmetic.

As we look into the fourth quarter, we also see positive impact going forward, but it's tough to predict where those markets are.

So I think it's a realistic, conservative expectation going into the fourth.

Okay, thank you.

And our next question comes from Jason Rodgers from Great Lakes Review.

Morning.

Good morning.

Just a few follow-up questions on the acquisitions.

Is management staying?

Yes, management is staying.

Because one of our key features of all our strategy of acquisitions is we buy a business -- we buy business which we think are strong.

Then they are strong because there's good management.

We take a very high emphasis on evaluating the management and trying to make sure, as good as you can, that management stays.

And can you give us an idea of the historical sales growth, the acquisitions?

Well, again, I think it's a bit challenging because both in those markets there is significant currency fluctuation.

But I think probably in a general side we were seeing anywhere from 10% to 15% on an average growth rate over the last three to five years.

And what about CapEx needs?

Relatively small.

Both are pretty -- relatively small operations.

We'd expect CapEx to be at or below depreciation.

And was there any goodwill added?

There was goodwill.

I don -- you know, we haven't finalized all the numbers yet, but again it's a relatively small amount of money.

I think our total purchase price paid was only about $15 million in total, so there wasn't a significant amount of goodwill.

And what are you expecting as far as accretion?

We would expect both transactions to be accretive.

We haven't come out with estimates.

Given the size it's $0.01 to $0.02 as we would go forward into 2007.

Okay, thank you,

Our next question comes from Claudia Shank --

Hi.

How are you?

Good, thank you.

How are you, Claudia?

I'm good, thank you.

I was just wondering if you could talk more about resins and one, sort of what the resin environment look like now?

And then also, how much has sort of the resin pass-through accounted for some of the improvement in the closures business, and is that sustainable or was it more one time?

Well, I think first of all, if you look -- and I think you have to separate resin into two -- for us two major platforms.

One being in the United States, the second being in Europe.

We saw resin moving up throughout the third quarter in the U.S.

More recent indications are we're going to see polypropolyne going down in the fourth quarter, at least that's our expectation.

In Europe it has been a little bit more stable and we're not seen some of the volatility.

When you look at the closures business, what you do is you do see a portion of their sales increase, as related to the resin pass-through.

Again, we have been able to pass-through pretty much on the dollar for dollar basis, which has had the impact of not changing our profitability, been able -- but not taking any losses with the resin side.

But it hasn't necessarily increased profit, so it's more of a -- it's a neutral affect to the bottom line.

I think right now the closures growth has certainly been fueled by some the resin, but the profitability won't be majorly impacted if resins would drop down into the fourth quarter.

Okay.

Thanks very much.

And then just in terms of acquisitions, obviously you've had some success this last quarter.

What do you see going forward, what's the [planet] look like?

Are there more opportunities?

We continue to evaluate potential acquisitions and we're looking at some of those at this point, but we cannot disclose them.

So, in line with our strategy to look for acquisition,s which would re-enforce our position, either by geographic presence or by new technologies, new products, market share.

Fitting into our overall strategy of dispensing systems we will continue to look and we will continue to try to reinforce our positions.

Okay, thanks very much.

Thank you.

You're welcome..

[OPERATOR INSTRUCTIONS] And we have a follow-up from Jason Rodgers from Great Lakes Review.

Would you be able to provide an estimate of -- as far as sales dollars on what you expect the contribution from acquisitions to be in the fourth quarter?

Overall, Jason, again we're talking overall acquisitions that that's a difficult process because some of the deals we had from last year -- we talked about the French company MBF, that -- we acquired that in early October.

That'll follow off the acquisition side.

So a real rough guess is I think we're probably in the area of $5, $6 million, maybe $7 million, and maybe a little bit higher than that in terms of acquisitions.

But it's a tough comparison, because we've got certain of companies we acquired in the fourth quarter of last year that won't be in there in 2006

So somewhere around $5 to $7 million total for Q4?

From some of the more recent deals we have done.

I don't have actually the numbers its we have done earlier.

Okay.

And just a question on the household segment.

That was off pretty significantly.

That was due to the Wal-Mart inventory reduction, is that correct?

No, no, not really.

It is due to our strategy of reducing our market presence in cases.

We have a market or customers where we do not see long-term potential of acceptable margins.

So we have walked away over the last three or four years in the aero -- essentially in the aerosol valve markets from two major customers.

And that's what you see in the down side here, because this business is maybe spray paint or insecticide, this kind of business.

We are also -- this business doesn't fit into our strategy of being leader in innovation, because these customers for these kind of products are really looking. essentially. for lower-cost supply rather than innovation.

So that's -- that is, I believe, is the main reason.

But do you believe Wal-Mart effect has worked its way through now?

Yes, I would say so.

Up to now we have not heard specifically fr --or did not see something we could pin down. except the -- as an influence of our sales over the last six months.

And in general the answer is yes, it seemed to have worked it through.

Okay.

I wonder if you can provide an update on anything new with simply squeezed or low cost sampling pump or the valve or flat per fume system.

There is anything new in those areas?

Okay.

And I wonder if you could provide an update on anything new with Simply Squeeze or your low-cost sampling pump or the bag on valve or the flat perfume system?

Just anything new in those areas.

In general -- first of all, this is a very broad question.

So the first area where we have been very innovative and where we see a lot of growth is the sampling.

That's why we invested over the last five years in innovation there.

And we have seen recent success with our products and mention this is the sample, which can be put into a magazine but can also be given away in airports as a sample.

So that has been chosen by a world-leading fragrance of Armani by [inaudible] for this distribution.

It's going to the market in the month of October.

And because of the reputation of this fragrance itself, this should help us to get additional recognition for this very break=through innovation.

The same thing also we were able to secure business with a company called [Youngbuy], which is a company which has sales, home-to-home sales, and they put [imagine] in their catalog.

Again, the customer was extremely excited.

We're now waiting for the feedback of the first launch by this customer.

We believe that -- we have quite a few projects going and we believe that this will be a successful product.

We continue to capitalize on the excellent success of our low-cost, small new sampling device where we are gaining market share.

And because of the differentiation of the product in terms of its technology and its design, we continue to be sold out and we continue to increase our capacity and it has been, again, the sampling area a real success.

You mentioned bag-on valve.

We have a lot of exciting projects there.

We will get new applications and we working on them.

That are some large customers who are looking to use that technology for very different products from what it has been in use in the past.

The [inaudible] in general in our market is going strong and is continuing strong and is helping us very much.

And in the beverage business, where we continue, again, to be successful in many parts of the world.

We have two big projects which have been launched in China.

We have several large customers in Europe.

We have first customer in the United States and we've now introduced a new improved cap for the beverage market, still using our [inaudible] technology, which allows for better filling capabilities in this business.

With very, very high speed of filling, that's extremely important.

It has also [tamper evidency] and some other features, and we believe it is the best closure for this kind of an application which is on the market.

There are in the -- since we talk about food, in the pump area, you may know the product Wishbone, which is now -- has been very successfully launched with a pump.

And there are other salad dressings and as a consequence looking at that.

In general, we believe that we are more successful than ever with our new product introductions.

Very good.

Thank you.

Our next question comes from George Staphos from Banc of America.

Hi, guys, good morning.

Good morning, George.

Good quarter and congratulations.

I guess -- the first question I have for you are -- and you might have mentioned earlier if I was off the call -- has the new Wal-Mart packaging initiative, which really isn't a new initiative.

Obviously they've talked about this for awhile.

Has that changed at all about the way you're thinking about new products for your customers?

Over the next couple of years, do you think it presents any opportunities?

I think in effect it is less of a risk or maybe no risk but rather more of an opportunity.

As we understand, their intention is that they want to get rid of cardboard packaging,, for example for toys and things like this.

And we believe at the same time they are looking for more convenience.

And one of the most successful products on their shelves is the Coppertone spray, where we are supplying two of our technologies, which is the bag-on valve and the locking [inaudible] system together.

That seems to be one of the best selling products at Wal-Mart these days.

And so we think that there's a continued strife for convenience and differentiation, and that's also recognized by Wal-Mart.

So we -- at this point, we believe that we have very good chances to [rather] have a positive impact from the Wal-Mart initiative than a negative.

Carl, does the bag-on valve technology or any of your other technologies allow you to actually take more size, if you will, out of your customer's packages, and primary packages here is what I'm referring to?

Yes.

I think, George, that in effect there are maybe several effects.

On one side, the customers and the consumers very much value the advantages in terms of convenience of some of our products.

And we believe this way, either we may create additional markets and also we will take market share with these.

And again, this Coppertone product in the suntan lotion area is very good example.

We think that we have enhanced the product of our customer to the point that he gains market share and we have gained market share with it.

And I guess a locking mechanism on the closure and on the valve probably, all else equal, would take away some demand for the secondary package or outer package, it would appear?

Yes, you are right.

I mean, it has the advantages -- up to now on those kind of packages an over-cap was used.

Now you don't need the over-cap any more, which very often was lost by the consumer anyway.

It also travels much better.

So the locking [inaudible], you're right, is taking away maybe additional packaging and it's reducing cost in this way.

But on the other hand for us, we are getting much better margin with this kind of a system compared to the standard aerosol valve.

Quick question in terms of run rates for the fourth quarter since you're obviously on a broadly disseminated forum here.

You gave some guidance, we appreciate that.

Can you give us any kind of statistics about run rates on volume you are seeing right now, as we sit here in mid October?

I think, George, we don't really -- you know, we haven't given out those specifics.

I can just that I think when you looked at all of our business, units we tend to be having good sales, incoming order throughout October.

It's always -- this is our most difficult quarter to project given December, with the plant shutdowns and timing.

But at right now I'd say in all of the segments, we're seeing reasonable growth coming in from all of the segments.

You'd mentioned, I think, in one of the earlier questions some very, very brief comments about fragrance and cosmetics.

The takeaway, I think, was so far it's been good for you, would that be fair?

Yes, it has been good.

In a fact I would even say, if I may, if you allow, it's excellent and that's due -- one side it seems to be clear that the market is growing.

Secondly, we believe that we are taking market share, and most likely to a good extent because of our innovation and some of the successes of some of our new products, which we have introduced.

And I think that, also, our enhanced capability for the [inaudible] positions which we have made are also helping us.

So the combination of all of these factors is helping

A couple others and I'll turn it over.

One thing, Peter, I was looking back at the numbers and I think you were mentioning I guess Chris' question on pharmaceutical comparisons.

Last year by our rough math you did around 5% growth, which traditionally has been what you'd like to target for pharmaceuticals, didn't seem particularly difficult.

Was there something unusual in the pharma comparison versus last year?

As far as I remember a bit, in last year the same quarter we had higher sales in tooling.

And there was also some of the generic product for Flonase, which was recorded in last year's sales.

So this was -- made the comparison a little bit more difficult for the third quarter.

Okay.

In general, if you look at the total in the pharma business, George, we had also some mix change at this point.

So the pump sales, which have higher prices, are flat or slightly going down, and we have a very, very strong business essentially for most of this year.

But getting stronger to the end of the year in the MDI, the meter dose aerosol involves valves, so there is also a mixed issue in there.

Okay, last question.

Obviously you've had some of your peers in the industry continue to grow through acquisition, as well.

You've had other companies enter via acquisition in the last six months or so.

They're very local markets, very much a market driven by new product introduction and innovation.

Having said that -- and that plays well to your strength -- has there been any kind of change in the competitor dynamic to the negative in any particular market, geographically speaking or product line speaking, over the last two to three quarters?

Thanks, guys.

No, we don't have seen anything like that.

I think that the acquisitions, also as you noted, are very recent ,so it will be difficult after such a short time to already make observations or assumptions about the strategy going forward of those competitors.

But up to this point, we have not seen any major change.

Okay, thanks.

Probably adding to that, if it's a little bit outside of the competitive side in terms of the acquisitions.

But what we have seen -- and you can see in some of the strong numbers we've got, both in fragrance and personal care -- is some of the market or customers that we may have lost to Asian competition over the last couple years are starting to come back.

Both quality and service have been key factors, and we're starting to see numerous of those companies -- those companies that had tried, if you will, Asian supply -- particularly in the low end of the fragrance market -- starting to come back to AptarGroup, so that's been also been a driver.

Okay, last one.

First quarter, $0.12 or so for the FAS 123?

That's a reasonable estimate at this point.

It's either going to be probably 11 to 12.

We haven't gotten, again, certainly gone through the numbers, but that's a reasonable estimate.

All right, guys.

Good luck on the quarter.

Thanks.

Thank you.

[OPERATOR INSTRUCTIONS] And, sir, I'm showing no further questions.

I'd like to return the call back to you.

Thank you.

I would like to thank everybody for participating in our call today, so thank you and good-bye.

Ladies and gentlemen, thank you for participating in today's conference.

This concludes the program.

You may all disconnect.

Everyone have a great day.