News Column

Bemis Company Reports Record Results for Second Quarter 2014

July 28, 2014

ENP Newswire - 28 July 2014

Release date- 25072014 - Neenah, Wisconsin - Bemis Company, Inc. (NYSE:BMS) today reported record second quarter 2014 diluted earnings of $0.65 per share, compared to $0.51 per share for the same quarter of 2013.

'I am very pleased with our strong operating performance during the second quarter,' said Henry Theisen, Bemis Company's Chairman and Chief Executive Officer. 'We achieved our highest gross margin since 2009 as a result of our continued pricing discipline and improved sales mix. Our new product innovations have created positive momentum to support continued performance improvement through the second half of 2014.'


U.S. Packaging

U.S. Packaging net sales of $725.8 million for the second quarter of 2014 represented a decrease of 7.1 percent compared to the same period of 2013. The divestitures of the Clysar business in 2013 and the Paper Packaging Division in 2014 reduced sales by 6.6 percent.

The remaining 0.5 percent decrease in net sales primarily reflects lower volumes in less differentiated product categories. U.S. Packaging operating profit for the second quarter of 2014 was $101.0 million, or 13.9 percent of net sales, compared to $80.3 million, or 10.3 percent of net sales, in the same period of 2013.

Excluding facility consolidation costs in 2013, segment adjusted operating profit would have been $101.5 million, or 13.0 percent of net sales. This margin improvement reflects the higher proportion of value-added products sold during the quarter.

Global Packaging

Global Packaging net sales for the second quarter of 2014 of $371.8 million represented a decrease of 0.7 percent compared to the second quarter of 2013. Currency translation decreased net sales by 5.8 percent, primarily driven by the Brazilian Real. The 2013 acquisition of our extrusion platform in Foshan, China increased net sales by 5.2 percent. Excluding the impact of currency translation and the acquisition, Global Packaging net sales were consistent with the prior year.

Increased unit sales of healthcare packaging were partially offset by the impact of generally lower consumption levels in South America. Global Packaging operating profit for the second quarter was $26.6 million, or 7.2 percent of net sales, compared to $27.4 million, or 7.3 percent of net sales, for the same period in 2013. Excluding the impact of facility consolidation program and acquisition-related integration items, segment adjusted operating profit would have been $27.1 million or 7.2 percent of net sales in 2013.

The net effect of currency translation decreased operating profit during the second quarter of 2014 by $1.7 million. The benefit of higher unit sales of value-added healthcare packaging was offset by the impact of generally lower unit sales of food packaging.

Pressure Sensitive Materials

Pressure Sensitive Materials net sales totaled $144.0 million for the second quarter, a 1.6 percent increase from the same period in 2013. Currency translation increased net sales by 2.0 percent compared to the prior year. The remaining modest decrease in net sales reflects lower unit sales of roll label and technical products offset by higher sales of value-added graphics products.

Pressure Sensitive Materials operating profit for the second quarter was $9.8 million, or 6.8 percent of net sales, compared to $6.0 million, or 4.2 percent of net sales in 2013. The increase in adjusted operating profit during the period reflects improved global production efficiencies and cost control as well as the strengthening demand in Europe for value-added graphic products sold for advertising and promotional applications.


Net debt to adjusted EBITDA was 2.2 times at June 30, 2014, slightly above our target ratio of 2.0 times. Net debt is defined as total debt less cash, and adjusted EBITDA is defined as last twelve months adjusted operating income plus depreciation and amortization.

Cash flow from operations for the quarter of $57.9 million compared to $94.0 million for second quarter of 2013, reflecting the cash payments associated with the closure of one Pressure Sensitive Materials plant and generally higher working capital levels.

On August 1, 2014, public notes totaling $400 million are scheduled to mature. Management plans to refinance these notes with a $200 million bank term loan which matures in 2022 and $200 million of commercial paper.


Management expects adjusted diluted earnings per share for the third quarter of 2014 to be in the range of $0.65 to $0.70 reflecting continued improvement in operating performance and sales mix.

Management raised the lower end of total year 2014 earnings guidance from the range of $2.40 to $2.55 per share to the range of $2.45 to $2.55 per share. This includes an anticipated effective income tax rate for 2014 of approximately 34.5 percent.

Management expects cash flow from operations for 2014 to be approximately $450 million. This revised expectation reflects cash expenses associated with the May 2014 closure of a manufacturing plant in Stow, Ohio and tax payments related to the gain on the sale of the Paper Packaging division.

Management expects its total year 2014 capital expenditures to be approximately $175 million.


This press release refers to non-GAAP financial measures: adjusted operating profit, adjusted operating profit as a percentage of net sales, net debt to adjusted EBITDA, and adjusted diluted earnings per share. These non-GAAP financial measures adjust for factors that are unusual or unpredictable. These measures exclude the impact of certain amounts related to facility consolidation and plant closure activities including employee-related costs, equipment relocation costs, lease termination payments, accelerated depreciation, and the write-down of equipment.

These measures also exclude gains on sales of property and divestitures and certain acquisition-related expenses including transaction expenses, due diligence expenses, professional and legal fees, purchase accounting adjustments for inventory and order backlog, integration expenses, the cash portion of any acquisition earn-out payments recorded as compensation expenses, and changes in fair value of deferred acquisition payments.

This adjusted information should not be construed as an alternative to results determined in accordance with accounting principles generally accepted in the United States of America (GAAP). It is provided solely to assist in an investor's understanding of the impact of these items on the comparability of the Company's ongoing business operations.


Statements in this release that are not historical, including statements relating to the expected future performance of the Company, are considered 'forward-looking' and are presented pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995.

Such content is subject to certain risks and uncertainties, including but not limited to general economic conditions, future changes in cost or availability of raw materials, our ability to adjust selling prices, consumer buying patterns, changes in customer order patterns, the results of competitive bid processes, costs associated with the pursuit of business combinations or divestitures, plant closures, a failure in our information technology infrastructure or applications, the funded status of our defined benefit plans, foreign currency fluctuations, unexpected costs associated with production relocation, changes in working capital requirements, changes in government regulations, and the availability and related cost of financing from banks and capital markets.

Actual future results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors which are detailed in the Company's regular SEC filings including the most recently filed Form 10-K for the year ended December 31, 2013.


Bemis Company, Inc. is a major supplier of packaging and pressure sensitive materials used by leading food, consumer products, healthcare, and other companies worldwide. Founded in 1858, Bemis Company is included in the S&P 500 index of stocks and reported 2013 net sales of $5.0 billion.

Bemis has a strong technical base in polymer chemistry, film extrusion, coating and laminating, printing, and converting. Headquartered in Neenah, Wisconsin, Bemis employs approximately 19,000 individuals worldwide.

More information about Bemis is available at our website,


Erin M. Winters


Investor Relations

Tel: (920)527-5288

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Source: ENP Newswire

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