West Announces First-Quarter 2022 Results, Declares Third-Quarter 2022 Dividend

West Pharmaceutical Services, Inc. (NYSE: WST)

EXTON, PA — West Pharmaceutical Services, Inc. (NYSE: WST) recenlty announced its financial results for the first-quarter 2022 and updated full-year 2022 financial guidance.

First-Quarter 2022 Summary (comparisons to prior-year period)

  • Net sales of $720.0 million grew 7.4%; organic sales growth was 11.0%.
  • Reported-diluted EPS of $2.29 increased 15.1%.
  • Adjusted-diluted EPS of $2.30 increased 12.2%.
  • The Company is reaffirming full-year 2022 financial guidance of net sales in a range of $3.050 billion to $3.075 billion.  The Company is raising full-year 2022 financial guidance of adjusted-diluted EPS to a new range of $9.30 to $9.45, compared to a prior range of $9.20 to $9.35.
  • The Company also announced that its Board of Directors has approved a third-quarter 2022 dividend of $0.18 per share. The dividend will be paid on August 3, 2022, to shareholders of record as of July 20, 2022.

“Adjusted-diluted EPS” and “organic sales growth” are Non-U.S. GAAP measurements.  See discussion under the heading “Non-U.S. GAAP Financial Measures” in this release.

“We delivered a solid first-quarter 2022 and remain on track to increase capacity throughout the year to satisfy the growing demand for our high-value products (HVP),” said Eric M. Green, President and Chief Executive Officer. “Our team members across the globe continue to demonstrate their passion to improve patient lives as they remain focused on executing our strategic initiatives despite macroeconomic challenges. Even with these challenges, and headwinds related to changes in foreign currency exchange rates, we remain well positioned for continued net sales growth and margin expansion. We are reaffirming our full-year 2022 net sales guidance, raising our full-year organic sales growth guidance, and raising our full-year 2022 adjusted-diluted EPS guidance.”

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Proprietary Products Segment
Net sales grew by 10.6% to $601.3 million. Organic sales growth was 14.4% with currency translation negatively impacting sales growth by 380 basis points.  High-value products (components and devices) represented more than 70% of segment sales and generated double-digit organic sales growth, led by customer demand for NovaPure® and Westar® components.

The Biologics market unit had double-digit organic sales growth. The Pharma and Generics market units had high-single digit and mid-single digit organic sales growth, respectively.

Contract-Manufactured Products Segment
Net sales declined by 6.6% to $118.7 million.  Organic sales decline was 3.8% with currency translation negatively impacting sales growth by 280 basis points. Segment performance was impacted by a decline of sales of components for diagnostic devices.

Financial Highlights
Operating cash flow was $151.2 million, an increase of 70.5%.  Capital expenditures in the quarter were $65.8 million.  Free cash flow (operating cash flow minus capital expenditures) was $85.4 million, an increase of 151.2%.

During the quarter, the Company repurchased 390,000 shares for $147.1 million at an average share price of $377.23 under its share repurchase program.

Full-Year 2022 Financial Guidance

  • The Company is reaffirming full-year 2022 net sales guidance to be in a range of $3.050 billion to $3.075 billion.
    • Organic sales growth is expected to be in a range of 11% to 12%, compared to prior guidance of approximately 10%.
    • Net sales guidance, based on current foreign exchange rates, includes an estimated full-year 2022 headwind of $115 million, compared to prior guidance of a $70 million headwind.
  • The Company is raising full-year 2022 adjusted-diluted EPS to be in a range of $9.30 to $9.45, compared to a prior range of $9.20 to $9.35.
    • Full-year reported-diluted EPS guidance range, based on current foreign currency exchange rates, includes an estimated headwind of $0.38, compared to prior guidance of a $0.21 headwind.
    • The revised guidance includes a $0.12 EPS positive impact from first-quarter tax benefits from stock-based compensation.
    • For the remaining quarters of the year, the Company’s EPS guidance range assumes a tax rate of 23% and does not include potential tax benefits from stock-based compensation.  Any tax benefits associated with stock-based compensation beyond those recorded in the first-quarter 2022 would provide a positive adjustment to the Company’s full-year adjusted-diluted EPS guidance
    • Full-year 2022 capital spending is expected to be $380 million. This includes incremental capital spending to support capacity expansions at existing HVP facilities.
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For more information, visit www.westpharma.com.

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