HIGHLIGHTS:
- Second quarter diluted EPS from
continuing operations increased 11.7 percent to $0.67 per
share.
- Gross profit as a percentage of net
sales improved to 21.5 percent in the second quarter, compared to
20.0 percent in the prior second quarter.
- U.S. Packaging segment operating profit
return on sales increased to 14.8 percent, compared to 13.9 percent
in the prior second quarter.
- Global Packaging segment adjusted
operating profit return on sales increased to 8.1 percent, compared
to 7.2 percent in the prior second quarter.
- Adjusted return on invested capital
increased to 10.0 percent at June 30, 2015, compared to 9.5 percent
at June 30, 2014.
- Cash flow from operations for the first
half of 2015 was $218.5 million, compared to $70.4 million for the
first half of the prior year. The second quarter contributed $133.3
million of operating cash flow, compared to $57.9 million for the
prior second quarter.
Bemis Company, Inc. (NYSE:BMS) today reported second quarter
2015 diluted earnings per share from continuing operations of $0.67
per share, compared to $0.60 in the same quarter of 2014, an
increase of 11.7 percent.
“I am pleased with our continued margin and cash flow
improvements this quarter, as we build toward our long-term
financial targets,” said William F. Austen, Bemis Company’s
President and Chief Executive Officer. “Consistent with our
strategy, strong mix of products and operational excellence
delivered margin improvement across our entire business. We saw
continued overall unit volume growth in our Global Packaging
business, offset by light volume in our U.S. Packaging business. As
we enter the second half of the year, we remain intently focused on
margins as we commercialize new products, deliver productivity
improvements, and execute strong pricing discipline.”
BUSINESS SEGMENT RESULTS
U.S. Packaging
U.S. Packaging net sales of $694.7 million for the second
quarter of 2015 represented a decrease of 4.3 percent, compared to
the same period of 2014, reflecting an approximate 5 percent
decrease in unit volumes, partially offset by an increase in sales
price and mix. Unit volumes declined primarily from the impact of
the Company’s strategic pricing decisions.
U.S. Packaging operating profit increased to $102.9 million in
the second quarter of 2015, or 14.8 percent of net sales, compared
to $101.0 million, or 13.9 percent of net sales in the same period
of 2014. This margin improvement primarily reflects continued
operational improvements and sales mix benefits, partially offset
by the impact of lower unit volumes.
Global Packaging
Global Packaging net sales for the second quarter of 2015 of
$335.6 million represented a decrease of 9.7 percent, compared to
the second quarter of 2014. Currency translation decreased net
sales by 15.9 percent, primarily driven by currencies in Latin
America. Excluding the impact of currency translation, net sales
increased by 6.2 percent, reflecting an increase in unit volumes of
approximately 5 percent, along with positive sales price and
mix.
Global Packaging operating profit for the second quarter was
$27.0 million, or 8.0 percent of net sales, compared to $26.6
million, or 7.2 percent of net sales, for the same period in 2014.
The net effect of currency translation decreased operating profit
during the second quarter of 2015 by $4.9 million, primarily driven
by currencies in Latin America. Excluding the restructuring costs,
segment adjusted operating profit would have been $27.3 million, or
8.1 percent of net sales. (See attached schedule: “Reconciliation
of Non-GAAP Operating Profit.”)
Margin improvement in the Global Packaging segment reflects
strong operating performance and the overall favorable impact of
increased sales of sophisticated, value-added packaging.
CAPITAL STRUCTURE AND CASH FLOW
Total company net debt to adjusted EBITDA was 2.2 times at
June 30, 2015. 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 half of 2015 was $218.5
million, compared to $70.4 million for the first half of 2014. The
second quarter contributed $133.3 million of operating cash flow,
compared to $57.9 million for the prior second quarter. Strong cash
flow was driven by disciplined management of working capital.
During the second quarter, Bemis repurchased 1.0 million shares,
for a total of $45.9 million. At June 30, 2015, the remaining
Board authorization for the repurchase of Bemis common stock was
4.9 million shares.
2015 OUTLOOK
Management expects full year adjusted diluted earnings per share
to be in the range of $2.52 to $2.62, as compared to the previous
range of $2.52 to $2.67.
Commenting on the remainder of the year, Austen stated, “Our
updated EPS guidance reflects the impact of currency translation,
partially offset by the benefits of cost discipline. We continue to
execute our innovation pipeline to grow our business with the right
mix of products. We have improved the timing of our capital
projects that will support productivity improvements and future
growth; I am confident in the results these investments will bring.
We are keenly focused on continuing to deliver progress toward our
long term margin targets.”
Management is raising its capital expenditures outlook for 2015
to be in the range of $200 million to $215 million, an increase
from its previous outlook of $185 million to $200 million. This
increase reflects the improved timing of executing planned projects
to support growth and operational efficiency.
Management expects an effective income tax rate for the full
year 2015 of slightly less than 34 percent.
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 significant
property and divestitures, certain litigation matters, 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, potential loss of
business or increased costs due to customer or vendor
consolidation, 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 second 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 June 30, Six Months Ended June
30, 2015 2014 2015
2014 Net sales $ 1,030.3 $ 1,097.6 $ 2,070.4 $ 2,192.6 Cost
of products sold 809.1 878.6 1,631.7 1,762.7
Gross profit 221.2 219.0 438.7 429.9 Operating
expenses: Selling, general and administrative expenses 103.9 104.4
210.3 211.0 Research and development 11.5 11.1 22.8 22.2
Restructuring costs 0.3 — 5.3 — Other operating income (3.7 ) (3.1
) (6.3 ) (5.2 ) Operating income 109.2 106.6 206.6 201.9
Interest expense 12.8 17.0 25.9 33.9 Other non-operating
income (2.2 ) (1.7 ) (4.0 ) (14.4 ) Income from continuing
operations before income taxes 98.6 91.3 184.7 182.4
Provision for income taxes 33.0 30.6 62.1 62.0
Income from continuing operations 65.6 60.7 122.6
120.4 Income (loss) from discontinued operations —
5.1 (2.6 ) (5.4 ) Net income $ 65.6 $ 65.8
$ 120.0 $ 115.0
Basic earnings per
share: Income from continuing operations $ 0.68 $ 0.61 $ 1.26 $
1.19 Income (loss) from discontinued operations — 0.05
(0.03 ) (0.05 ) Net income $ 0.68 $ 0.66 $
1.23 $ 1.14
Diluted earnings per share:
Income from continuing operations $ 0.67 $ 0.60 $ 1.25 $ 1.18
Income (loss) from discontinued operations — 0.05
(0.03 ) (0.05 ) Net income $ 0.67 $ 0.65 $ 1.22
$ 1.13 Cash dividends paid per share $ 0.28
$ 0.27 $ 0.56 $ 0.54 Weighted
average shares outstanding (including participating securities):
Basic 96.9 100.4 97.3 101.0 Diluted 98.1 101.4 98.4 101.9
BEMIS COMPANY,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET
(in millions)
(unaudited)
June 30, 2015
December 31, 2014 (1)
ASSETS
Cash and cash equivalents $ 87.8 $ 47.1 Trade receivables
498.3 496.3 Inventories 557.0 575.8 Prepaid expenses and other
current assets 147.5 168.6 Total current assets
1,290.6 1,287.8 Property and equipment, net
1,146.1 1,142.9 Goodwill 937.4 963.1 Other
intangible assets, net 157.5 168.6 Deferred charges and other
assets 42.2 48.4 Total other long-term assets 1,137.1
1,180.1
TOTAL ASSETS $ 3,573.8 $
3,610.8
LIABILITIES
Short-term borrowings $ 26.1 $ 31.3 Accounts payable 299.3
268.2 Employee-related liabilities 83.7 90.8 Accrued income and
other taxes 32.8 23.3 Other current liabilities 60.5 67.8
Total current liabilities 502.4 481.4
Long-term debt, less current portion 1,357.8 1,311.6 Deferred taxes
224.6 223.4 Other liabilities and deferred credits 147.3
161.4
TOTAL LIABILITIES 2,232.1 2,177.8
EQUITY
Common stock issued (128.1 and 128.0 shares, respectively)
12.8 12.8 Capital in excess of par value 567.0 559.7 Retained
earnings 2,151.5 2,086.8 Accumulated other comprehensive loss
(371.6 ) (291.7 ) Common stock held in treasury (31.6 and 29.8
shares at cost, respectively) (1,018.0 ) (934.6 )
TOTAL
EQUITY 1,341.7 1,433.0
TOTAL
LIABILITIES AND EQUITY $ 3,573.8 $ 3,610.8
(1) The December 31, 2014 balance sheet includes
reclassification adjustments to maintain comparability with the
June 30, 2015 balance sheet. These reclassifications include moving
other receivables into "Prepaid expenses and other current assets"
and adjustments required by new accounting standards. These changes
had no impact to operating cash flow.
BEMIS COMPANY,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(unaudited)
Six Months Ended June 30, 2015
2014
Cash flows from
operating activities
Net income $ 120.0 $ 115.0 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 80.1 94.8 Excess tax benefit from share-based payment
arrangements (0.5 ) (0.6 ) Share-based compensation 9.5 7.9
Deferred income taxes (0.9 ) (14.2 ) Income of unconsolidated
affiliated company (0.9 ) (0.6 ) Non-cash impairment charge of
discontinued operations 3.2 — Gain on sale of property and
equipment (3.6 ) (0.4 ) Gain on divestitures — (9.4 ) Changes in
working capital, excluding effect of divestitures and currency 10.1
(116.6 ) Changes in other assets and liabilities 1.5 (5.5 )
Net cash provided by operating activities 218.5 70.4
Cash flows from
investing activities
Additions to property and equipment (96.3 ) (69.3 ) Proceeds from
sale of property and equipment 7.4 7.8 Proceeds from divestitures
13.6 79.8 Net cash (used in) provided by
investing activities (75.3 ) 18.3
Cash flows from
financing activities
Proceeds from issuance of long-term debt 2.0 — Repayment of
long-term debt — (0.2 ) Net borrowing of commercial paper 43.5 32.5
Net (repayment) borrowing of short-term debt (0.5 ) 5.3 Cash
dividends paid to shareholders (55.2 ) (54.6 ) Common stock
purchased for the treasury (83.4 ) (84.1 ) Deferred payments for
business acquisitions (4.4 ) (6.6 ) Excess tax benefit from
share-based payment arrangements 0.5 0.6 Stock incentive programs
and related tax withholdings (2.7 ) (1.5 ) Net cash used in
financing activities (100.2 ) (108.6 ) Effect of exchange
rates on cash and cash equivalents (2.3 ) 5.4 Net
increase (decrease) in cash and cash equivalents 40.7 (14.5 )
Cash and cash equivalents balance at beginning of year 47.1
141.7 Cash and cash equivalents balance at end
of period $ 87.8 $ 127.2
BEMIS COMPANY,
INC. AND SUBSIDIARIES
OPERATING PROFIT
AND PRETAX PROFIT
(in millions)
(unaudited)
Three Months Ended June 30, Six Months Ended June
30, 2015 2014 2015
2014 U.S. Packaging operating profit $ 102.9 $ 101.0 $ 198.3
$ 192.8 Global Packaging: Operating profit before
restructuring costs 27.3 26.6 56.6 50.7 Restructuring costs (0.3 )
— (5.3 ) — Operating profit 27.0 26.6 51.3 50.7
General corporate expenses (20.7 ) (21.0 ) (43.0 ) (41.6 )
Operating income 109.2 106.6 206.6 201.9
Interest expense 12.8 17.0 25.9 33.9 Other non-operating
income (2.2 ) (1.7 ) (4.0 ) (14.4 )
Income from
continuing operations before income taxes $ 98.6 $ 91.3
$ 184.7 $ 182.4
BEMIS COMPANY,
INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP OPERATING PROFIT
(in millions, except per share
amounts)
(unaudited)
Three Months Ended June 30, Six Months
Ended June 30, 2015 2014 2015
2014 U.S. Packaging Net sales $ 694.7 $
725.8 $ 1,401.7 $ 1,464.0 Operating
profit as reported $ 102.9 $ 101.0 $ 198.3 $
192.8 Operating profit return on sales As reported
14.8 % 13.9 % 14.1 % 13.2 %
Global Packaging Net
sales $ 335.6 $ 371.8 $ 668.7 $ 728.6
Operating profit as reported $ 27.0 $ 26.6 $ 51.3 $ 50.7
Non-GAAP adjustments: Restructuring costs (1) 0.3 —
5.3 — Operating profit as adjusted $
27.3 $ 26.6 $ 56.6 $ 50.7
Operating profit return on sales As reported 8.0 % 7.2 % 7.7 % 7.0
% As adjusted 8.1 % 7.2 % 8.5 % 7.0 %
(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 June 30, Six Months
Ended June 30, 2015 2014 2015
2014 Continuing Operations Diluted earnings
per share, as reported $ 0.67 $ 0.60 $ 1.25 $ 1.18 Non-GAAP
adjustments per share, net of taxes: Gain on divestiture (1) — — —
(0.06 ) Restructuring costs (2) — — 0.03 —
Diluted earnings per share, as adjusted $ 0.67
$ 0.60 $ 1.28 $ 1.12
(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 months ended June 30,
2015
June 30, 2015 March 31, 2015
December 31, 2014 September 30,
2014 Income from Continuing Operations Operating
income (EBIT) $ 109.2 $ 97.4 $ 98.5 $ 107.3 $ 412.4 Restructuring
costs 0.3 5.0 — — 5.3
Adjusted EBIT (Continuing Operations) 109.5 102.4 98.5 107.3
417.7
(Loss) Income from Discontinued Operations —
(2.6 ) 1.9 (44.5 ) (45.2 ) Income taxes — (1.1 ) 0.8 9.6 9.3 Other
non-operating loss (income) — — — 0.1
0.1
Discontinued Operations EBIT — (3.7 ) 2.7 (34.8 )
(35.8 ) Discontinued operations impairment and plant closure —
3.7 — 43.9 47.6
Adjusted EBIT
(Discontinued Operations) — — 2.7 9.1 11.8
Adjusted EBIT (Bemis Company Inc.) (a) $ 109.5
$ 102.4 $ 101.2 $ 116.4 $ 429.5
Average Invested Capital1 (b) 2,795.5
Assumed tax rate2 (c) 35.0 %
Adjusted ROIC
(a * (1 - c) / b) 10.0 %
Quarter Ended
12 months ended June 30,
2014
June 30, 2014 March 31, 2014
December 31, 2013 September 30,
2013 Income from Continuing Operations
Operating income (EBIT) $ 106.6 $ 95.3 $ 94.2 $ 87.6 $ 383.7
Restructuring costs — — (0.6 ) 15.8 15.2
Adjusted EBIT (Continuing Operations) 106.6 95.3 93.6
103.4 398.9
(Loss) Income from Discontinued
Operations 5.1 (10.5 ) 5.9 5.1 5.6 Income taxes 4.0 (5.8 ) 2.5
2.9 3.6 Other non-operating income 0.1 — — —
0.1
Discontinued Operations EBIT 9.2 (16.3 )
8.4 8.0 9.3 Discontinued operations plant closure — 25.0
— — 25.0
Adjusted EBIT (Discontinued
Operations) 9.2 8.7 8.4 8.0 34.3
Adjusted EBIT (Bemis Company Inc.) (a) $ 115.8
$ 104.0 $ 102.0 $ 111.4 $ 433.2
Average Invested Capital1 (b) 2,974.3
Assumed tax rate2 (c) 35.0 %
Adjusted ROIC
(a * (1 - c) / b) 9.5 %
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150723005437/en/
Bemis Company Inc.Erin M. Winters,
920-527-5288Director of Investor Relations
Bemis (NYSE:BMS)
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