HIGHLIGHTS:
- First quarter adjusted diluted EPS from
continuing operations increased 17.3 percent to $0.61 per
share.
- Net sales increased 2.5 percent in the
first quarter, excluding the impact of currency translation and
divestitures.
- Gross profit as a percentage of net
sales improved to 20.9 percent in the first quarter, compared to
19.3 percent in the prior first quarter.
- U.S. Packaging segment operating profit
return on sales increased to 13.5 percent, compared to 12.4 percent
in the prior first quarter.
- Global Packaging segment adjusted
operating profit return on sales increased to 8.8 percent, compared
to 6.8 percent in the prior first quarter.
- Adjusted return on invested capital
increased to 9.9 percent at March 31, 2015, compared to 9.4 percent
at March 31, 2014.
- Cash flow from operations for the first
quarter was $85.2 million, compared to $12.5 million for the prior
first quarter.
- Management confirmed full year adjusted
EPS outlook in the range of $2.52 to $2.67.
Bemis Company, Inc. (NYSE:BMS) today reported first quarter 2015
diluted earnings per share from continuing operations of $0.58 per
share, consistent with the same quarter of 2014. Excluding the
effect of plant closure costs and transaction-related gains
detailed in the attached schedule, “Reconciliation of Non-GAAP
Earnings Per Share,” adjusted diluted earnings per share from
continuing operations would have been $0.61 in 2015 and $0.52 in
2014.
“I am pleased with our strong operating performance this
quarter, reflecting continued progress in the implementation of our
long-term strategy,” said William F. Austen, Bemis Company’s
President and Chief Executive Officer. “Sales growth in our target
end-markets delivered margin improvements throughout our entire
business. Sales mix improvements in our U.S. Packaging business
were offset by light consumer demand and some customer delays of
certain shipments. Global Packaging unit volumes were strong in
Europe, Asia, and our healthcare packaging business, offset by
lighter unit volumes in Latin America due to continuing tough
economic conditions. We are focused on improving the margin profile
of our entire business, regardless of volume conditions, and I am
confident that we will continue to deliver our targeted margin
improvement during both the short and long terms.”
BUSINESS SEGMENT RESULTS
U.S. Packaging
U.S. Packaging net sales of $707.0 million for the first quarter
of 2015 represented a decrease of 4.2 percent, compared to the same
period of 2014. The first quarter 2014 divestiture of the Paper
Packaging Division reduced sales by 5.1 percent. Excluding the
impact of this divestiture, net sales increased by 0.9 percent,
reflecting an increase in sales price and mix of approximately 3
percent, partially offset by lower unit volumes resulting from
light consumer demand and select customer delays of certain
shipments.
U.S. Packaging operating profit increased to $95.4 million in
the first quarter of 2015, or 13.5 percent of net sales, compared
to $91.8 million, or 12.4 percent of net sales in the same period
of 2014. This margin improvement primarily reflects continued sales
mix benefits and operational efficiencies.
Global Packaging
Global Packaging net sales for the first quarter of 2015 of
$333.1 million represented a decrease of 6.6 percent, compared to
the first quarter of 2014. Currency translation decreased net sales
by 12.6 percent, primarily driven by currencies in Latin America.
Excluding the impact of currency translation, net sales increased
by 6.0 percent, reflecting an increase in price and mix. Strong
unit volumes in Europe, Asia, and the healthcare packaging business
were offset by unit volume decreases in Latin America due to
continuing difficult economic conditions.
Global Packaging operating profit for the first quarter was
$24.3 million, or 7.3 percent of net sales, compared to $24.1
million, or 6.8 percent of net sales, for the same period in 2014.
The net effect of currency translation decreased operating profit
during the first quarter of 2015 by $3.8 million, primarily driven
by currencies in Latin America. Excluding the plant closure costs
discussed below, segment adjusted operating profit would have been
$29.3 million, or 8.8 percent of net sales. (See attached schedule:
“Reconciliation of Non-GAAP Operating Profit.”)
During the quarter, management initiated the planned closure of
one of its healthcare packaging plants, resulting in a $5.0 million
pre-tax charge. Products produced at this facility will be
transitioned to another healthcare packaging manufacturing facility
during 2015. The future margin benefits of this plant closure have
been included in management’s long-term targets reviewed during its
March 2015 Investor Day.
Margin improvement in the Global Packaging segment reflects
strong operating performance and the overall favorable impact of
increased sales of sophisticated, value-added packaging for medical
device, pharmaceutical, and perishable food applications.
CAPITAL STRUCTURE AND CASH FLOW
Total company net debt to adjusted EBITDA was 2.2 times at March
31, 2015, slightly above the Company’s target ratio of 2.0 times.
Net debt is defined as total debt less cash, and adjusted EBITDA is
defined as the last twelve months total company adjusted operating
income plus depreciation and amortization.
Cash flow from operations for the first quarter of 2015 was
$85.2 million, compared to $12.5 million for 2014.
During the first quarter, Bemis repurchased 0.8 million shares,
for a total of $37.5 million. At March 31, 2015, the remaining
Board authorization for the repurchase of Bemis common stock was
5.9 million shares.
2015 OUTLOOK
Management confirmed its full year adjusted diluted earnings per
share guidance in the range of $2.52 to $2.67.
Management confirmed that it expects capital expenditures for
2015 to be in the range of $185 million to $200 million to support
the increased customer demand for value-added products. Management
also confirmed its expectation of an effective income tax rate for
the full year 2015 of approximately 34 percent.
Commenting on the remainder of the year, Austen stated, “We
confirm our previous guidance. Our underlying business is very
strong, and we are focused on working to offset potential currency
headwinds with cost discipline throughout our entire business. As
we enter our seasonally strong second quarter, we will continue to
remain focused on efficiently commercializing new products, on
productivity improvements, and on strong pricing discipline during
the remainder of 2015.”
PRESENTATION OF NON-GAAP INFORMATION
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, adjusted
return on invested capital, 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, accelerated depreciation, and the write-down of equipment.
These measures also exclude gains or losses 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.
FORWARD-LOOKING STATEMENTS
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, the 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, foreign
currency fluctuations, 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, 2014.
INVESTOR CONFERENCE CALL
Bemis Company, Inc. will webcast an investor telephone
conference regarding its first quarter 2015 financial results this
morning at 11 a.m., Eastern Time. Individuals may listen to the
call on the Internet at www.bemis.com under “Investor Relations.”
Listeners are urged to check the website ahead of time to ensure
their computers are configured for the audio stream. Instructions
for obtaining the required, free, downloadable software are
available in a pre-event system test on the site.
ABOUT BEMIS COMPANY, INC.
Bemis Company, Inc. (“Bemis” or the “Company”) is a major
supplier of flexible packaging used by leading food, consumer
products, healthcare, and other companies worldwide. Founded in
1858, Bemis reported 2014 net sales from continuing operations of
$4.3 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 17,000 individuals worldwide. More information about
Bemis is available at our website, www.bemis.com.
BEMIS COMPANY,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share amounts) (unaudited)
Three Months Ended March 31, 2015
2014 Net sales $ 1,040.1 $ 1,095.0 Cost of
products sold 822.6 884.1 Gross profit 217.5 210.9
Operating expenses: Selling, general and administrative
expenses 106.4 106.6 Research and development 11.3 11.1
Restructuring costs 5.0 — Other operating income (2.6 ) (2.1 )
Operating income 97.4 95.3 Interest expense 13.1 16.9
Other non-operating income (1.8 ) (12.7 ) Income from
continuing operations before income taxes 86.1 91.1
Provision for income taxes 29.1 31.4 Income
from continuing operations 57.0 59.7 Loss from discontinued
operations (2.6 ) (10.5 ) Net income $ 54.4 $ 49.2
Basic earnings per share: Income from
continuing operations $ 0.58 $ 0.58 Loss from discontinued
operations (0.03 ) (0.10 ) Net income $ 0.55 $ 0.48
Diluted earnings per share: Income from continuing
operations $ 0.58 $ 0.58 Loss from discontinued operations (0.03 )
(0.10 ) Net income $ 0.55 $ 0.48 Cash
dividends paid per share $ 0.28 $ 0.27
Weighted average shares outstanding (including participating
securities): Basic 97.7 101.5 Diluted 98.8 102.4
BEMIS COMPANY,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET
(in millions) (unaudited) March
31, December 31, 2015 2014
ASSETS
Cash and cash equivalents $ 60.3 $ 47.1 Accounts receivable,
net 568.6 566.1 Inventories 570.9 575.8 Prepaid expenses and other
current assets 99.9 98.8 Total current assets 1,299.7
1,287.8 Property and equipment, net 1,124.5
1,142.9 Goodwill 934.5 963.1 Other intangible
assets, net 160.5 168.6 Deferred charges and other assets 51.5
52.7 Total other long-term assets 1,146.5
1,184.4
TOTAL ASSETS $ 3,570.7 $
3,615.1
LIABILITIES
Short-term borrowings $ 29.3 $ 31.3 Accounts payable 310.9
272.4 Accrued salaries and wages 68.6 86.6 Accrued income and other
taxes 43.5 23.3 Other current liabilities 57.1 67.8
Total current liabilities 509.4 481.4
Long-term debt, less current portion 1,357.1 1,315.9 Deferred taxes
223.3 223.4 Other liabilities and deferred credits 152.6
161.4
TOTAL LIABILITIES 2,242.4 2,182.1
EQUITY
Common stock issued (128.1 and 128.0 shares, respectively)
12.8 12.8 Capital in excess of par value 561.8 559.7 Retained
earnings 2,113.4 2,086.8 Accumulated other comprehensive loss
(387.6 ) (291.7 ) Common stock held in treasury (30.6 and 29.8
shares at cost, respectively) (972.1 ) (934.6 )
TOTAL
EQUITY 1,328.3 1,433.0
TOTAL
LIABILITIES AND EQUITY $ 3,570.7 $ 3,615.1
BEMIS COMPANY,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions) (unaudited) Three
Months Ended March 31, 2015 2014
Cash flows from
operating activities
Net income $ 54.4 $ 49.2 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 39.7 47.6 Excess tax benefit from share-based payment
arrangements (0.4 ) (0.4 ) Share-based compensation 4.3 3.5
Deferred income taxes (0.9 ) (12.5 ) Income of unconsolidated
affiliated company (0.5 ) (0.4 ) Non-cash impairment charge of
discontinued operations 3.2 — Gain on sale of property and
equipment (0.4 ) — Gain on divestitures — (9.4 ) Changes in working
capital, excluding effect of currency (17.8 ) (56.8 ) Changes in
other assets and liabilities 3.6 (8.3 ) Net cash
provided by operating activities 85.2 12.5
Cash flows from
investing activities
Additions to property and equipment (39.5 ) (33.5 ) Proceeds from
sale of property and equipment 4.0 2.5 Proceeds from divestitures —
79.8 Net cash (used in) provided by investing
activities (35.5 ) 48.8
Cash flows from
financing activities
Net borrowing of commercial paper 33.7 13.3 Net (repayment)
borrowing of short-term debt (1.8 ) 5.1 Cash dividends paid to
shareholders (28.0 ) (27.5 ) Common stock purchased for the
treasury (37.5 ) (43.2 ) Excess tax benefit from share-based
payment arrangements 0.4 0.4 Stock incentive programs and related
tax withholdings (2.6 ) (1.5 ) Net cash used in financing
activities (35.8 ) (53.4 ) Effect of exchange rates on cash
and cash equivalents (0.7 ) 2.6 Net increase in cash
and cash equivalents 13.2 10.5 Cash and cash equivalents
balance at beginning of year 47.1 141.7 Cash
and cash equivalents balance at end of period $ 60.3 $ 152.2
BEMIS COMPANY,
INC. AND SUBSIDIARIES
OPERATING PROFIT
AND PRETAX PROFIT
(in millions) (unaudited) Three
Months Ended March 31, 2015 2014
Operating Profit U.S. Packaging $ 95.4 $ 91.8 Global
Packaging 24.3 24.1 119.7 115.9 General
corporate expenses (22.3 ) (20.6 )
Operating income
97.4 95.3 Interest expense 13.1 16.9 Other
non-operating income (1.8 ) (12.7 )
Income from
continuing operations before income taxes $ 86.1 $ 91.1
BEMIS COMPANY,
INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP OPERATING PROFIT
(in millions, except per share amounts) (unaudited)
Three Months Ended March 31, 2015
2014 U.S. Packaging Net sales $ 707.0
$ 738.2 Operating profit as reported $ 95.4
$ 91.8 Operating profit return on sales As
reported 13.5 % 12.4 %
Global Packaging Net sales $
333.1 $ 356.8 Operating profit as reported $
24.3 $ 24.1 Non-GAAP adjustments: Plant closure costs (1)
5.0 — Operating profit as adjusted $ 29.3
$ 24.1 Operating profit return on sales As
reported 7.3 % 6.8 % As adjusted 8.8 % 6.8 % (1) Includes
costs related to the plant closure in Philadelphia, Pennsylvania (a
healthcare packaging manufacturing facility).
BEMIS COMPANY,
INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP EARNINGS PER SHARE
(unaudited) Three Months Ended March
31, 2015 2014 Continuing
Operations Diluted earnings per share, as reported $ 0.58 $
0.58 Non-GAAP adjustments per share, net of taxes: Gain on
divestiture (1) — (0.06 ) Plant closure costs (2) 0.03 —
Diluted earnings per share, as adjusted $ 0.61
$ 0.52 (1) Gain on divestiture relates to the sale of
the Paper Packaging Division. (2) Includes costs related to the
plant closure in Philadelphia, Pennsylvania (a healthcare packaging
manufacturing facility).
BEMIS COMPANY,
INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP RETURN ON INVESTED CAPITAL
(in millions) (unaudited) Quarter
Ended
12 monthsendedMarch
31,2015
March 31, 2015
December 31, 2014
September 30, 2014
June 30, 2014
Income from Continuing Operations Operating income (EBIT) $
97.4 $ 98.5 $ 107.3 $ 106.6 $ 409.8 Restructuring costs 5.0
— — — 5.0
Adjusted EBIT (Continuing
Operations) 102.4 98.5 107.3 106.6 414.8
(Loss)
Income from Discontinued Operations (2.6 ) 1.9 (44.5 ) 5.1
(40.1 ) Income taxes (1.1 ) 0.8 9.6 4.0 13.3 Other non-operating
loss (income) — — 0.1 0.1 0.2
Discontinued Operations EBIT (3.7 ) 2.7 (34.8 ) 9.2 (26.6 )
Discontinued operations impairment and plant closure 3.7 —
43.9 — 47.6
Adjusted EBIT
(Discontinued Operations) — 2.7 9.1 9.2 21.0
Adjusted EBIT (Bemis Company Inc.) (a)
$ 102.4 $ 101.2 $ 116.4 $ 115.8 $ 435.8
Average Invested Capital1 (b)
2,868.2
Assumed tax rate2 (c) 35.0 %
Adjusted ROIC (a * (1 - c) / b) 9.9 %
Quarter Ended
12 monthsendedMarch
31,2014
March 31, 2014
December 31, 2013
September 30, 2013
June 30, 2013
Income from Continuing Operations Operating income (EBIT) $
95.3 $ 94.2 $ 87.6 $ 84.2 $ 361.3 Restructuring costs — (0.6
) 15.8 20.9 36.1
Adjusted EBIT (Continuing
Operations) 95.3 93.6 103.4 105.1 397.4
(Loss) Income
from Discontinued Operations (10.5 ) 5.9 5.1 4.0 4.5 Income
taxes (5.8 ) 2.5 2.9 2.2 1.8
Discontinued Operations EBIT (16.3 ) 8.4 8.0 6.2 6.3
Discontinued operations plant closure 25.0 — —
— 25.0
Adjusted EBIT (Discontinued Operations)
8.7 8.4 8.0 6.2 31.3
Adjusted
EBIT (Bemis Company Inc.) (a) $ 104.0 $ 102.0 $
111.4 $ 111.3 $ 428.7
Average
Invested Capital1 (b) 2,975.1
Assumed tax
rate2 (c) 35.0 %
Adjusted ROIC (a * (1 - c) /
b) 9.4 %
1 - Average invested capital includes all
equity and debt amounts, less cash calculated on a five-quarter
average.
2 - Tax rate assumed to be the U.S.
federal statutory rate.
Bemis Company Inc.Erin M. Winters,
920-527-5288Director of Investor Relations
Bemis (NYSE:BMS)
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