Matt DellaMaria - IR Steve Hagge - President & CEO Bob Kuhn - EVP, CFO & Secretary.

George Staphos - Bank of America Ghansham Panjabi - Robert W. Baird Chip Dillon - Vertical Research Alex Chi - Goldman Sachs Adam Josephson - KeyBanc Mark Wilde - BMO Capital Markets Debbie Jones - Deutsche Bank Brian Rafn - Morgan Dempsey Chris Manuel - Wells Fargo Jason Rogers - Great Lakes Review Jon Andersen - William Blair.

Ladies and gentlemen, thank you for standing by. Welcome to AptarGroup's 2015 Third Quarter Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Introducing today's conference call is Mr. Matt DellaMaria, Vice President, Investor Relations. Please go ahead, sir..

Thank you, Kevin, and welcome everyone. Participating on the call today are Steve Hagge, President and Chief Executive Officer; and Bob Kuhn, Executive Vice President, Chief Financial Officer and Secretary. Steve will begin our call with an overview of our quarterly performance.

Bob will then discuss some of our financial results and then we'll open it up for questions. Information that will be discussed on today's call includes some forward-looking comments. Actual results or outcomes could differ from those projected or contained in the forward-looking statements.

Please refer to AptarGroup's SEC filings to review factors that could cause actual results to differ materially from those projected or contained in the forward-looking statements. We will post a replay of this conference call on our website and AptarGroup undertakes no obligation to update the forward-looking information contained therein.

I would now like to turn the conference call over to Steve..

Thanks, Matt and good morning, everyone. Yesterday Aptar reported another strong quarter. I'm particularly pleased that we are able to achieve improved operating margins compared to the prior year across each business segment and report record third quarter earnings.

When you look at earnings per share on a comparable currency basis, our third quarter earnings per share increased 30% over the prior year. I'll briefly comment on the performance of each segment and then turn it over to Bob for financial review.

Our Beauty and Home segment reported another good operational results in spite of a challenging quarter in terms of top line growth. Demand from the beauty and personal care markets continue to be weak while we saw increase in demand from the home care market.

Even with the reoccurring softness in the two key markets, operating margins improved over the prior year due to cost controlling efforts and lower input cost compared to a year ago.

In our pharma segment, demand for our drug delivery systems continue to be particularly strong in the prescription market where we saw increased sales of our metered dose inhaler valves for asthma and COPD treatments, and nasal spray systems for allergy treatments.

Demand for our elastomere primary components for the injectibles market also increased in the quarter. The consumer healthcare market was more or less flat as orders from certain customers servicing Eastern Europe continued to be soft relative to the prior year.

Excellent operating margins were achieved due to the favorable mix of products sold, high levels of productivity, and the impact of our cost savings effort. Our Food and Beverage segment also had a good quarter with broad-based demand for innovative dispensing closures.

Core sales growth was muted by a decrease in custom tooling sales compared to the prior year and the impact of passing-through resin decreases to our customers. When we backed these out - when we booked back both of these out, we've reported excellent product sales growth in both, the food and beverage markets across a wide variety of categories.

It was also a strong operational quarter, and high levels of productivity along with focus on cost containment lead to improved operating margins compared to the prior year. As we look forward to the fourth quarter, the currency exchange rate environment should continue to have a negative effect on our translated results.

We also don't foresee any significant changes in the macroeconomic conditions that we are facing today.

As we've seen in recent years, our fourth quarter has a tendency to be one of the softer quarters of the year, in part due to customers seeking to reduce their inventory levels towards the end of the year and the seasonality of our Northern Hemisphere beverage market.

However, the diversity of our business remains the key strength and with the diligent job focus on our cost we expect earnings to improve over the prior year on a comparable currency basis.

Aptar is well positioned to grow over the long-term in the different markets we serve as we continue to leverage our product and process synergies across our three business segments. The company is also in excellent financial condition.

We recently completed an accelerated share repurchase program, and last week we announced an increase to our quarterly dividend. We will continue to execute our balance capital allocation strategy including investing in projects that will drive profitable growth and returning value to shareholders.

At this time, I'll turn it over to Bob who will cover a few financial details..

Thank you, Steve and good morning everyone. I'll briefly cover a few details and then we'll turn it over for questions. In looking at how our business segments performed in the quarter I'll start with our Beauty and Home segment.

Despite a challenging quarter operating margin improved to 8.7%, primarily due to continued cost containment efforts and lower input costs. Weak conditions in key markets resulted in lower sales volumes compared to a year ago and core sales declined 1%.

Sales to the beauty market were equal to the prior year as weak demand in fragrance category was mostly offset by increased demand in the facial skincare category. Sale through the personal care market decreased 6% as softness continued in the hair care and sun care categories. Sales through the home care market increased 8%.

Our pharma segment had another excellent quarter achieving an operating margin of 30.2% and core sales growth of 10%. Sales for the prescription market increased 16%, primarily driven by increases in demand for metered dose inhalers and our nasal delivery systems.

Sales for the consumer health care market were equal to the prior year, and this is mostly due to certain customers choosing to reduce inventory and continued weakness in the Eastern Europe compared to the prior year. And sales for injection market increased 9% due to broad-based global demand.

Looking at food and beverage, this segment also had a very good quarter and reported improved operating margins of 14.8% and core sales growth of 3% compared to the prior year.

As we pointed out in the press release, core growth for this segment is negatively impacted by approximately seven percentage points coming from a decrease in custom tooling sales, and another three percentage points due to the passing through of resin cost decreases to customers.

If we excluded these to effects, core product sales increased approximately 13%. Looking at each market, sales for the food market increased 5%, primarily due to increased demand for our dispensing closures in both, the condiment and granular food categories.

And sales for the beverage market increased 2%, driven primarily by increased demand for our innovative closures used on bottled waters. I'd like to point out that the food and beverage market growth rates include the negative effects of the decrease tooling sales and the resin pass-through effect.

When stripping out both of these effects, core product sales increased in both markets by double-digit percentages. Turning to cash flow, our free cash flow in the quarter was approximately $45 million compared to $52 million in the prior year.

For the year-to-date, our free cash flow is approximately $125 million compared to $76 million a year ago or an increase of $49 million. Looking at our balance sheet capitalization at the end of the quarter on a gross basis, the capital was approximately 42% while on a net basis it was approximately 22%.

We currently anticipate that our capital expenditures will be near our expected depreciation and amortization level for the full 2015 which is $150 million. The tax rate used in our fourth quarter guidance was comparable to the prior year fourth quarter rate and this will put our expected full year effective tax rate in the range of 31.5% to 32.5%.

At this time Steve and I will be glad to answer any of your questions..

[Operator Instructions] Our first question comes from George Staphos with Bank of America..

Thanks for taking my question, thanks for all the details everybody. Two questions on volume and your products, then I'll turn it over. Broadly, can you talk about the new product pipeline you've been in the last couple quarters, quite optimistic on that heading into 2016 at least that was our take.

Can you update us on your views there and if there are any particular end markets looking more attractive than perhaps the last quarter? And then specific, my second question in food and beverage, recognizing you said again its broad-based, are there any end markets that are particularly good within food and beverage.

And what do you think is changing your customers' views of your dispensing systems and their applicability to their products? Thanks..

Thanks, George. On the new product side, again we continue to be very optimistic about the pipeline and I think what's really positive for us, it really crosses all three segments. So we're seeing some very interesting applications across our pharma, food and beverage, and beauty and home side.

We've - one of the things - we've introduced a couple of new products and maybe I'll touch on a couple of these real quickly.

We've got a new product, for example, in beauty and home, a company called New Skin which is now introducing electronic dispensing system with multiple different products to be used at various times during the day and the evening.

And that is an airless system that's using a lot of our technology, and that just got introduced and is doing very well in its initial market introduction. We're doing a product which adore on a product that is a glass stopper application where you can apply to skin and it's got again a dispensing device and has unique app to our technology.

Our pharma base, we continue to have new products both, in the - over-the-counter market, as well as in the prescription side. We're seeing some stuff coming out on dermatology in terms of Bayer in Brazil. We're doing some stuff on sprays in terms of the marketplace and that's been positive.

And then we've got a couple of new applications in food and beverage in the quarter, both in terms of cancer products, the [indiscernible] also some water. So again, I think pharma tends to be very positive going in, and the indications are at least our customers looking probably, let's call it more optimistic as they go into 2016.

The second part of your question again in terms of food and beverage, we've historically been a bit stronger in terms of percentage of our business in food than it was beverage, 60-40 at one point, that's now becoming almost 50-50.

So we've seen some increases in our beverage market with new applications, and again, I think it's a broad-based market in terms where we're seeing the business. We're introducing - continue to seeing our customers introduce new products, really worldwide. So again, we're seeing good growth in Asia, as well as in Latin America..

Steve - but relative to what you're seeing right now would these trends be positive/negative or neutral to your existing mix? Thanks..

I'd say, we would come back and say they would be positive to the existing mix..

Okay, thanks. I'll turn it over..

Our next question comes from Ghansham Panjabi with Baird..

Good morning. Just as a follow-up to George's question on the growth outlook, anyway you cut it for pharma it's been a very, very strong set of top line numbers last few quarters.

I know Steve you touched on some new products, they are excited about there should we be concerned that as you cycle through these tougher comps at 2016 the growth rates will slow meaningfully in that segment?.

Ghansham, I think when you look at the business I don't think meaningfully slowing, it's going to be tougher comps as we get into 2016. We're growing at 8% to 10% in that pharma segment this year; our kind of growth is about 6% to 10%. So I think you're going to see more of a comeback to more at the mean as we go into 2016.

But again, I'm really excited about a lot of the new projects we've got in a lot of the different region. So I don't think you're going to see an appreciable drop-off as we start the year..

Okay. And then on the hair and sun care weakness, is that primarily in the U.S. still or is broader from a geographic standpoint? And is there any incremental thought from your customers as to why these two categories remain so weak? Thanks..

I guess if you take a look at it, I think it's more broad on geographic on both, the hair and sun care for us and we're a major player in both of those categories. What I think is positive is we're starting to get some sun care - some new sun care stuff going on in the U.S.

where consumers are looking to maybe upgrade to brands and maybe revitalize some of the brands as they go into 2016. That I think is boding well for us. If you're asking kind of why even on the hair care, some of that is style-based. So we'll see where that goes going into the future.

So we don't expect it to deteriorate, it's going to be more of how much it's going to accelerate as we go into 2016..

Okay, all right. Thanks so much..

Our next question comes from Chip Dillon - Vertical Research..

Good morning. First question is, could you just give us a general feel of what you're seeing in the M&A environment, how that might have changed over the last year. It's been - I guess the last major acquisition you found was Stelmi which has certainly worked out great.

I mean are there more opportunities like that right now out there or is it a function that people aren't selling or the prices are just too high?.

I would say that in terms of opportunities we're getting a chance to look at we're seeing the market to be - but I'd say relatively strong. So there is certainly challenges in terms of how people are viewing growth, the dynamic around price.

But in terms of opportunities, we're seeing quite a few opportunities to look at that would fit strategically for us. So I'd say we're optimistic about the M&A market as we look forward over the next 12 to 18 months..

Got you. And would - I know you've said in the past that the pharma segment which just continues to show great numbers and this makes total sense that you would be willing to buy a business that might not have quite the same set of fantastic return profile as what you have right now.

Is that still the case and is that why we - maybe the way you think of it is, we shouldn't see those margins come down closer to the mid-20s unless you do and acquisition.

In other words, there is nothing inherently in your business as a - in your pharma business as it exists today that would suggest the margins are coming down, that would still be in your best guess, a function of change in this and how that segment looks because of an acquisition..

I think Chip there is a couple things. Certainly this year has been an outstanding year for our pharma operations and the 30% operating margins that we're generating today are outside frankly the range that we've given to the street. We're looking still at 23% to 28%.

Some of that is going to be growth that we anticipate coming in our consumer healthcare market, as well as our injectable market which will probably have a bit lower margins than our ex-market. So to answer your question, we might see it come down a little bit but I think offsetting that is still the growth.

So those are excellent margins from our - and as you've said, we'll continue to value - Stelmi was a good example. Stelmi had lower margins in our traditional pharma but we feel that's an outstanding acquisition for us and been able to accelerate our growth..

Got you. And the last question is, it seems like in recent months and certainly this earning season that of all places you're hearing that Europe is more of the brightest spot for a lot of companies, even in some cases versus the U.S.

And given your - that's your biggest geography, have you noted things getting better there in recent quarters or has it been good all year or could it even be going the other way?.

Chip, maybe I can take that, I can give you some geographic breakdown. In fact, Europe was our strongest in terms of core sales in the quarter, they were up about 5%, a lot of that has been driven by the strength of our pharma business. But also we've seen really good growth in the food and beverage business as well.

For the year-to-date, it's up about 3%, so pretty stable but good core growth, nonetheless..

The other thing I think Chip that is for us in Europe is a bit of anomaly because you have to continue to consider when we're selling products in Europe, a lot of our customers product that we sell too, those products end up in other regions whether it's upper end, fragrance cosmetic or pharma.

So we've not really seen - if you go back and look at Aptar, we've never seen as big of a drop as let's say some of the other companies in Europe. We've actually been relatively - we've seen growth in Europe over the last couple years where other people were seeing declines..

Got you.

And last question is, when you look at your core sales growth year-over-year would you say, is you're just a rough ballpark and - I know you don't like to break it down by segment but is there - if we look at the three percent for the whole company would that have been - how much higher would that have been if we hadn't seen the resin pass-through?.

The resin had about 1% negative impact on the 3% core growth. So if we hadn't had resin pass-throughs we would have been up 4%..

Which would approximate your volume improvement, I guess..

Correct..

Got you, thank you..

Our next question comes from Alex Chi with Goldman Sachs..

Good morning everyone..

How are you doing Alex?.

Good, Steve, thank you. Just a couple on for you on healthcare, just all the news flow around drug pricing and just the cost there, do you think that has any impact on your business as you look forward.

And then I think in the press release you talked about destock, what business segment were you most preferring to there?.

First on the healthcare side, I think there is certainly our cuts and this deals as much with our customers are feeling pressure in terms of drug pricing.

But on the other side I think what we are also seeing is a lot of opportunities for growth where you can make drugs more cost effective by taking those in the home, not doing them - the over-the-counter business for us continues to improve.

So I would tell you that the net effect of today's market probably for us is that worst neutral and probably today positive in terms of what we're seeing the growth. When you're looking at - again, we're still very positive on that side.

When you're looking at destocking, you have a couple of things I'd like to point out and we've talked a little bit about this in my comments.

In the northern hemisphere our beverage market, since we're out of the summer season, fourth quarter tends to be slower in people's consumption of water and isotonic drinks, so that has a natural occurrence and that will slow for us in the quarter.

But our customers, as they go to year-end always talk about they want to get careful in terms of the balance sheet. So - but we don't see any huge inventory destocking, we are going to see in really pockets in each of the three business segments..

That's very helpful. And then just taking a step back and looking at the business over the last - call it year, as resin prices have been materially lower than in years past, can you just talk about what impact, if any - just the lower resin price environment has had on the business..

I think we have to split the resin to a couple of areas. As you can see, for the resin we actually pass on our dispensing closure business which is a significant part of both, the beauty and home, and in food and beverage. We pass those through to the customers. That should be a benefit from our customers as they look at their products.

That being said, in terms of some of our products that have resin components, we've been able to actually come back and accelerate margins due to those lower input costs.

So net-net, it's probably been a net positive for Aptar and we hope at least as we go into the fourth, it looks that materials should be - have a little bit of a slight downward bias but in worst case being flat as we go into the quarter..

Thank you, Steve..

Our next question comes from Adam Josephson with KeyBanc..

Thanks, good morning everyone. Steve, I'm sure you are devastated by the Cubs loss to the Mets in our Championship Series..

No comment Adam, I'm still in Chicago today, so be careful..

In terms of your fourth quarter guidance, I went back to look over the past three years the average sequential decline in the fourth quarter has been about $0.07. Now your guidance this year implies about $0.20.

I'd appreciate there is some seasonality in your business but it seems particularly pronounced this year unless earnings in the third quarter were unusually high for some reason.

So Bob, can you just help us with how much seasonality there really is in your business and why you're expecting the magnitude of this sequential decline that you are?.

Let me try that Adam because I think it's an interesting question but first of all I think our third quarter was very strong. So I mean if you look at the numbers, we're coming off much stronger than our third quarter would have been, for example, let's say last year.

But at the other side as we look at the fourth, it's a tougher business for us to project given the inventory issues and some of the seasonality. Seasonality for us is mostly going to come in our food/beverage business, that's more of the seasonality.

But frankly, our customers as we get into December there is a lot of plant closings which makes it hard to project. So as we look at the fourth, we've got to - we have to take those into consideration, so we took a look at in terms of where we thought sales would come back. And also importantly from us is the mix of our business.

But I think when you strip both of those out; one of the things that I'm really pleased is that on a constant currency basis if you go to the mid part of our range, we're still looking to be up over 10% or around 10% over the 2014 level. So that's our best shot of where we think we're going to be in the fourth..

Got it, thanks for that Steve. I knew you were asked about pharma margin earlier, this is more of an overall margin question. Your year-to-date EBITDA margins are just in line with your long-term target already, so you're there.

So what should we make of that? Do you think that you might be able to raise that range - that target in the foreseeable future or do you have reason to think that you're perhaps over-earning this year on account of the lower raw material cost that you mentioned earlier, extremely strong growth in pharma or any other factors for that matter..

Again, I think if you look at it we're extremely pleased with the margin profile this year. I'm - I think in terms of our business, the people internally have done an outstanding job of controlling cost. But that being said, the other thing you brought up is the lower input cost and I think that certainly had a benefit to where we're at.

As we've said in the past, the targets we've given on the long-term margins, we're going to stay with because I think as we look overtime you're going to see things moving up and down.

So the good news is we're at the high side but I'm not - at this point we wouldn't be willing to go out and say we're going to move the target another two to three points up..

Okay, Steve and just one on Latin America. Steve or Bob can you just talk about what you're seeing there, just given everything we're hearing and reading about Latin America on net.

Did you see notable deterioration as the quarter progressed?.

I think in Latin America - this really goes back to I think one of the strengths of Aptar, it really becomes very dependent on our different markets. So the biggest negative impact that we saw in the quarter was coming in our beauty and home operations, the fragrance cosmetics side.

But frankly, we saw growth coming in our pharma and our food and beverage side, so I would tell you that when you look at the economic side I think it is starting to stabilize a bit, but certainly not saying a huge amount of improvement.

So our customers are - maybe a little bit more optimistic going into 2016 but it's still going to be a challenging market for us as we go into next year..

Thanks a lot, Steve, I appreciate it..

Our next question comes from Mark Wilde with BMO..

Good morning. Bob, a couple of questions for you. I wanted just - any thoughts on kind of share repurchase activity now that that accelerated program is complete..

Well, we've got about another $100 million left on the authorization from the Board. So we're going to be evaluating that as we open into the fourth quarter and if anything we'd probably go into open market. And then review that as we normally do on a quarterly basis with the Board in the future..

And then just one other one, it looks like the tax rate guidance for the year has dropped by about 100 bips.

Can you give us a little color on that?.

Sure. So in the U.S. - if you remember back to last year, we were slightly lower than 30% in the fourth quarter, a lot of that is dependent on the extension to some of the U.S. pass-through legislation.

So because it hasn't been extended yet which in the last couple of years has happened in the fourth quarter, we're not allowed to assume that in our tax rate so we have to kind of go along assuming and reporting that, that it will not get extended but our feeling is that it's going to get extended again.

So that's why we went with guidance consistent on the tax rate with the last year..

Okay, that's two, I'll turn it over..

Our next question comes from Debbie Jones with Deutsche Bank..

Hi, good morning. I don't want to discount all your performance in beauty and home, I mean it's a pretty good improvement, better than we were expecting but it is shorter than your long-term target. And I'm just wondering if you could give us kind of a path as to how you get to that 10% EBIT margin in the segment..

I think Debbie, again as you pointed out and I appreciate, we've seen significant improvement in the beauty and home performance throughout the year and I think what's been particularly impressive from my perspective is outlook at the business. Despite really challenging market conditions we've improved operating margins by almost 200 basis points.

That being said, so we're - I think 8.6% or something like that in the third quarter. To get us to the 10% where we need to go, we're going to need to see organic growth. So we're going to - today we're flat to 1% to 2%, we're going to need to see that 3%, 4% growth to get us back to 10%.

I'm confident that the markets that we've got have been some unusual situations - that's very probable as we go forward. But I think that if you're looking for one other component to get us back to the 10% is where we're going to come back.

One of the things that even looking going into next year, we just came out of a conference that we participated in Monaco that talks about luxury goods and it's probably been the most - we had more people attending, looking at our products on the new technologies that we've got.

I think that helps boding well for potential growth in that segment as we go into 2016-2017..

Thanks, that's helpful. My second question, you mentioned injectables, I think they improved 8% year-over-year.

Can you talk - how of that is the market versus kind of the Stelmi using Aptar scale, I mean how should we think about that growth rate going forward?.

I think it is probably a combination at this point where I think we were up 9% in terms of our injectable growth on a year-over-year.

Certainly the market is growing and - but we are also benefiting that we're getting into - and I think our benefit really of Aptar is going to be not as much in 2016 but probably as we get into 2017, 2018, because the stuff that we're working on now getting qualified, frankly, the old Stelmi organization probably wouldn't have been even on those projects.

So today we're at or slightly above the market but I think it's more for the future that Aptar will really bring a lot of value here..

Okay, thanks. I'll turn it over..

Our next question comes from Brian Rafn with Morgan Dempsey..

Good morning, guys..

Good morning, Brian..

Maybe I missed it but did you guys shed any comment on the perfume cosmetics side, low end, more of the economy versus say that pursue as the higher end? And then, what are you guys seeing all for Christmas sales?.

I think on the fragrance cosmetic we've seen across both, the upper part of the market and the lower that the fragrance sales have been not as robust as what we've seen in the last couple years. So that's probably 1% to 2% growing market. Offsetting that somewhat for us has been the facial creams cosmetic side, and that's been growing very well.

So I think it's a bit of a mixed bag in terms of what you're seeing. And you can - there are certain customers that you can talk about whether it's Avon or Cody, you can - they've had certain challenges.

But if we look to Christmas, I think the Christmas buying is going to be somewhat comparable to what we saw in 2014 from what we're hearing at this point..

And then just Steve, kind of a bigger picture, last couple of years we've seen certainly some heightened tensions - just in the last week the Russians paused the U.S. Reagan's carrier group where you've got NATO troops moving to the Baltic borders; Iran in the bomb has blown Hamas [ph].

Any sense on global tensions - I know, obviously guys do a lot of staple out in the sesame stuff, consumer care, what do some of these global big picture going back to the Cold War, do they have any implications for your customers, in their sense of - trends going forward, there are sense of business order patterns..

It's a tough question because it's fairly broad but I think Brian, I guess I'll give you two things; I think it's somewhat dependent on the markets that we're in. So as you've said, the real plus for Aptar is we're pretty well diversified. Certainly, one of the areas we've seen a bit softness is today's Eastern Europe including Russia.

If you're a Western company selling into that market, that's a bit more challenging. Offsetting that is our local Russian customers we've seen to be doing pretty well. I think when - if I had to take from a macro standpoint, I think it adds to just a bit more conservatism on our customers as opposed to a robust - let's go all out into 2016.

They are still looking to grow but it's still more of a cautious growth. That would be the best way I can articulate it..

Thanks, Steve. I appreciate it..

Our next question comes from Chris Manuel of Wells Fargo.

Good morning, gentlemen, congratulations on the strong quarter..

Thanks, Chris..

I wanted to circle back to the growth pipeline. The last quarter or two if I recollect, tooling sales have been done quite a bit, I mean traditionally we've thought of tooling sales as sort of a good leading indicator into what growth looks like going forward but it seems like your growth in food and beverage has been pretty good.

Has that isolated any particular area within there, first? And then second, is it perhaps that customers are pulling stock product as opposed to stock with their names on or things of that nature?.

Chris, let me touch a little bit on the tooling. We did see a bit of a decrease in the first quarter but second quarter and third quarter on a consolidated global basis, were relatively flat on a reported basis.

What you've got is you've got a mix between the segments so even though it was negatively impacting food and beverage which was down in the quarter and tooling sales, it was a slight positive in the other two.

So it's difficult to predict what's going to happen quarter-to-quarter and it will vary from segment-to-segment but customers are always going to have an option between using a stock-based product and a custom tooling product.

I mean, I wouldn't look so much into that in terms of forecasting different growth volumes or anything for any one of the segments..

Okay, that's good color. With respect to the other regions, I think you gave us what volumes were like in Europe. Do you have - sometimes you give us a read on Latin America, Asia Pacific as well, given the weak macro environments there. I'm just curious to see what your year-over-year volumes are like..

Absolutely, I can give that to you Chris. So as I mentioned for the quarter, Europe was up 5% on a core basis, the U.S. was up 2% in the third quarter, Latin American on a core basis was down 6% but almost all of that or entirely all of that was due to the decrease in the tooling, primarily in the food and beverage market.

And Asia was up 1% in the quarter..

That's helpful. One question for Steve if I can touch one in here, as you look at acquisition opportunities, how you're feeling about the markets today.

Are you finding any - sort of other tangential niches that look Aptar like for you with return characteristics or is it more kind of stay the course with repurchase and dividend hike?.

No, I think we're - I think I've mentioned a little bit earlier in the call that, I think the M&A opportunities that Aptar is seeing is probably as positive as we've seen over the last year or so. So, again from ours - we're going to continue to look at the capital allocation side.

If an acquisition makes sense for us strategically, it's certainly something that we got the balance sheet to be able to do. So I think there is good opportunities that fit within Aptar's niche as we want to go forward and those two things we'll see as we go into late 2015 into 2016..

Thanks guys..

Thanks..

Our next question comes from Jason Rogers with Great Lakes Review..

All my question are asked, thanks..

Our next question comes from Jon Andersen with William Blair..

Good morning, Steve. Good morning, Bob. Just a couple of quick ones. I think Bob, you mentioned that resin took about 1% off sales growth in the quarter based on the past-through.

If you can, can you comment on how resin impacted your earnings in the quarter? And then as we look to Q4, what should we think about the other resin dynamic, both, in terms of impacting sales and earnings as well. Thanks..

Sure. It had a slight positive on the bottom line, slightly more than it was in the second quarter, it's around $1 million, primarily split between the beauty and home, and food and beverage market.

Looking forward to the fourth, again, we're going to be comparing fourth-to-fourth year so I would expect that there will still be an impact on resin pass-through's when we talk about fourth quarter 2015 compared to 2014.

It's still too early to tell exactly which way - or if we're going to see any additional swings but certainly we're seeing Europe trending a little bit downward compared to what we've had in the third quarter. So we could see some additional pass-through's depending on when that hits and depending on the customer's terms with us..

Excellent, thanks One more bigger picture question I guess on beauty and home. It's been at least a couple of years now I guess since the beauty and home business has grown on a core basis in line with your longer term target of 4% to 7%.

I'm just wondering is that a function of - that kind of the end market demand or value added dispensing solutions are further penetrated, are further along the curve - adoption curve, if you will.

Is there a competitive dynamic at work here? Do you feel like you're holding or gaining share or just trying to get a little bit more color on structurally what's going on there and maybe how quickly you think you might return to more of a profile growth of 4% to 7% there? Thanks..

It's a good question Jon, it's one that we continue to take a look at. So you're right, last year we were slightly below our - if I look at 2014, we were about 3% growth last year, we're bit lower than that. Our view frankly is that there is still a lot of opportunities in terms of conversion opportunities.

And one of the areas we continue to look at is our home care market which is a relatively small market for us and has - we think pretty good growth opportunity base. So when you start to look at some of the issues that are affecting as particularly in 2015, in our view a lot of those really macro issues and reflecting issues around our customers.

So for example, we're a major supplier to Procter & Gamble in their fragrance business, they are down significantly when you just take a look at their operating results. So the good news is we're the major supplier, the bad news is when they are down, we're going to be down.

So, on a macro basis we've seen some softness, and again we've talked some of the economics But again from our perspective that 4% to 6%, 7% growth is still something that we are long-term encouraged we're going to be able to achieve..

And from a competitive standpoint, anything - any kind of a seed change there? You feel you're holding share broadly in the space?.

Yes, I think and when we take a look at it, certainly we're not winning everything that we're going to compete on but we're also - we're the majority player in a lot of the markets. And from our - when we're taking look at the market we still feel we are at the same market share or I mean in some cases above more we were in the past..

Thanks a lot guys, congrats on a great quarter..

Thanks, Jon..

[Operator Instructions] Our next question is a follow-up question from George Staphos with Bank of America..

Hi, everyone, two quick ones. Steve and Bob, if you can talk again about tooling sales and how it relates to your product activity, I mean our intuition would be that if you are seeing a very good new product pipeline that more of those products would tend to be custom and therefore, more likely to have custom tooling.

Is that a correct assumption or not and has it reconcile with - again, in particular, in food and beverage - the decline that we saw in the third quarter? And then, maybe to slog M&A one last time, when you look at the environment are you seeing a greater number of larger assets available, not talking about valuation whether to track or not but are you singing a greater number of larger targets available relative to what would've been the case a year ago? And how would you frame the valuation quotient versus a year ago? Thanks, and good luck on the quarter..

First I'll take the tooling question that you had. Specifically addressing the food and beverage decrease in the quarter, as you remember last year we talked about a new Gatorade project that was launched in Mexico, that had some pretty significant tooling sales last year in the third quarter.

So that is more of a comparable issue with what we had there. It's really going to depend on whether the customer wants a very unique shaped design or something unique that we can only sell to them. If these custom tooling projects are successful in the market then we could also see follow-on increases in capacity.

And like Steve had mentioned, the new skin project that was one that had some tooling in the positive for beauty and home this year. So we need to have some time before we can see what the follow-on is, and if it's a trend of more customized projects.

But to answer your question, yes, when there is tooling sales, they typically lead to custom type product sales in the future..

I'll try to touch on the M&A but again, on the tooling I think George, the other side is, if you go back three to four years our tooling sales have been relatively consistent from a year-to-year basis, so it's not like we're seeing appreciable declines or frankly increases in it, it has to be a little bit on the style-based on where people go.

When you asked about M&A in terms of what we're saying, are there bigger deals that are out there. I think it's really a combination of larger and smaller transactions that are out.

I think still the challenge comes back in terms of valuation, if you look at multiples that are in our sector, there is certainly a good half turn to a turn higher than they were probably a year ago.

So good companies that are being sold are not inexpensive to buy but there are opportunities and again they may fit - what fits well with Aptar as we go forward..

Thank you very much..

Our next question is the follow-up question from Mark Wilde with BMO..

Yes, I've got two of them.

One, Steve, I'm just curious about how much is left in the tank in terms of margin improvement from kind of cost savings?.

We're going to continue to look at that, I think it's going to be very dependent on the sector - excuse me, on the business segment. I think if you come back, we're going to - we aggressively look at cost in terms of new equipment, how we get more efficient, so I always think there is improvement in productivity.

The bigger challenge to that is can we make sure we keep that to ourselves or how much do we have to share that with customers due to the pricing side because it's a competitive marketplace. But I wouldn't come back and be - I wouldn't tell you we're at the top or where we're at margin wise. So we always take a look at opportunities in that side..

Yes, sure, I mean part of this is just the ongoing nature of any business. The other question I had Steve, you've kind of called out this customer inventory reduction as we near year end.

Are you seeing anything unusual this year, and - your order flow as you've come through October that makes you feel like it's going to be a bigger issue in 2015 than it was in 2014 or you're just calling it out so that people are aware that this is a normal seasonal issue?.

I think it's certainly more to the second side but we're not seeing broad-based. And again, I think the challenge I mentioned a bit earlier in the call, it's tough for us to take a look at December to figure out where customers' orders are at.

So we'll get some customers going we like products shipped the first week in January because they are addressing up the balance sheet so.

But in terms of how we're looking or how our customers are looking, it's - there is nothing out there that has a broad base, everybody is taking out inventory, it tends to be more business as usual and hard to predict..

Okay, all right, fair enough. Good luck in the fourth quarter, good luck next year..

Thank you..

And I'm not showing any further questions at this time. I'd like to turn the call back over to Mr. Hagge. You may continue..

Thank you. This concludes our call today. And I'd like to thank everyone for joining us. Have a good day..

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect. Have a wonderful day..