SUMMARY:
- First quarter adjusted diluted earnings
per share from continuing operations were $0.60 in 2016, which
includes a reduction of approximately $0.03 from the net impact of
currency translation when compared to last year.
- Gross profit margins improved 70 basis
points to 21.6 percent of net sales for the first quarter of 2016,
compared to 20.9 percent in the prior first quarter.
- Adjusted return on invested capital
increased to 10.5 percent at March 31, 2016, compared to 9.9
percent at March 31, 2015.
- On February 4, 2016, the Board
increased the authorization for share repurchases by 20 million
additional shares of Bemis Company stock, supplementing the
previous remaining authorization.
- On April 20, 2016, Bemis announced its
agreement to acquire the medical device packaging operations and
related value-added services of SteriPack Group.
- Management expects full year adjusted
EPS to be in the range of $2.68 to $2.78, as compared to the
previous range of $2.68 to $2.83.
Bemis Company, Inc. (NYSE:BMS) today reported first quarter 2016
diluted earnings per share from continuing operations of $0.59.
Excluding the effect of restructuring and acquisition-related costs
detailed in the attached schedule, “Reconciliation of Non-GAAP
Earnings Per Share,” adjusted diluted earnings per share from
continuing operations would have been $0.60 in 2016 and $0.61 in
2015. The net impact of currency translation decreased earnings per
share in the first quarter of 2016 by approximately $0.03, as
compared to the prior first quarter.
“We continue to make progress on many aspects of executing our
long-term strategy. However, in the short-term, our operating
performance this quarter was mixed,” said William F. Austen, Bemis
Company's President and Chief Executive Officer. “Our U.S.
Packaging business delivered strong performance driven by
manufacturing efficiencies. Our Global Packaging business was
dampened by operational challenges in our Latin American business
and by the inefficient ramp-up of our newly hired workforce at our
expanded healthcare packaging facility in Wisconsin. Our teams are
working to rectify these issues, and operating performance should
be stabilized by the third quarter. I remain confident in our
strategy and our ability to create long-term value for our
stakeholders.”
BUSINESS SEGMENT RESULTS
U.S. Packaging
U.S. Packaging net sales of $660.5 million for the first quarter
of 2016 represented a decrease of 6.6 percent compared to the same
period of 2015. Compared to prior year, unit volumes were flat
during the first quarter. The decrease in net sales was driven by
the contractual pass through of lower raw material costs as well as
the mix of products sold.
U.S. Packaging operating profit increased to $101.7 million in
the first quarter of 2016, or 15.4 percent of net sales, compared
to $95.4 million, or 13.5 percent of net sales, in 2015. This
margin increase primarily reflects operational improvements
attributable to manufacturing efficiencies and the Company’s asset
recapitalization program.
Global Packaging
Global Packaging net sales for the first quarter of 2016 of
$307.4 million represent a decrease of 7.7 percent compared to the
same period of 2015. Currency translation reduced net sales by 20.3
percent, primarily due to currencies in Latin America. The December
2015 Emplal acquisition increased net sales by 4.0 percent.
Excluding the impact of currency translation and the acquisition,
net sales increased by 8.6 percent, reflecting increased unit
volumes of approximately 3 percent, along with increased sales
price and mix.
Global Packaging operating profit for the first quarter was
$15.7 million compared to $24.3 million for the same period in
2015. Excluding restructuring and acquisition-related costs,
segment adjusted operating profit would have been $16.3 million, or
5.3 percent of net sales, a decrease from 8.8 percent of net sales
in 2015. (See attached schedule: “Reconciliation of Non-GAAP
Operating Profit.”) The net impact of currency translation reduced
operating profit during the first quarter of 2016 by $3.8 million
as compared to the same period in 2015, primarily due to currencies
in Latin America. The margin decline in the Global Packaging
segment reflects operational inefficiencies in the Company’s Latin
American business and also in the Company’s North American
healthcare business.
CASH FLOW AND CAPITAL STRUCTURE
Cash flow from operations for the three months ended March 31,
2016 was $52.6 million, compared to $85.2 million in the prior
year. Current year cash flows reflect normal working capital usage
for the first quarter.
Total company net debt to adjusted EBITDA was 2.4 times at
March 31, 2016. 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.
Capital expenditures totaled $30.6 million for the three months
ended March 31, 2016, reflecting continued investment in new
capacity to support growth initiatives and productivity
improvements.
During the first quarter, Bemis repurchased 1.0 million shares,
for a total of $44.3 million. At March 31, 2016, the remaining
Board authorization for the repurchase of Bemis common stock was
22.4 million shares.
2016 OUTLOOK
Management expects full year adjusted diluted earnings per share
to be in the range of $2.68 to $2.78, as compared to the previous
range of $2.68 to $2.83. Management lowered the top end of the full
year EPS guidance range fully on account of the impact of the
operational inefficiencies in the Company’s Latin American business
and in the Company’s North American healthcare business.
Management confirmed that it expects full year cash from
operations to be in the range of $450 to $500 million.
Management also confirmed that it expects capital expenditures
for 2016 of approximately $200 million to support productivity and
efficiency projects as well as growth projects driven by increased
customer demand for value-added products.
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, 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, changes in
customer order patterns, consumer buying 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 applications or infrastructure, 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, 2015.
INVESTOR CONFERENCE CALL
Bemis Company, Inc. will webcast an investor telephone
conference regarding its first quarter 2016 financial results this
morning at 12 p.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 2015 net sales from continuing operations of
$4.1 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 17,500 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, 2016
2015 Net sales $ 967.9 $ 1,040.1 Cost of
products sold 759.1 822.6 Gross profit 208.8 217.5
Operating expenses: Selling, general and administrative
expenses 99.4 106.4 Research and development 11.5 11.3
Restructuring and acquisition-related costs 0.8 5.0 Other operating
income (2.3 ) (2.6 ) Operating income 99.4 97.4
Interest expense 15.4 13.1 Other non-operating expense (income) 0.1
(1.8 ) Income from continuing operations before
income taxes 83.9 86.1 Provision for income taxes 27.7
29.1 Income from continuing operations 56.2
57.0 Loss from discontinued operations — (2.6 )
Net income $ 56.2 $ 54.4
Basic
earnings per share: Income from continuing operations $ 0.59 $
0.58 Loss from discontinued operations — (0.03 ) Net income
$ 0.59 $ 0.55
Diluted earnings per
share: Income from continuing operations $ 0.59 $ 0.58 Loss
from discontinued operations — (0.03 ) Net income $ 0.59
$ 0.55 Cash dividends paid per share $ 0.29
$ 0.28 Weighted average shares outstanding
(including participating securities): Basic 94.9 97.7 Diluted 95.9
98.8
BEMIS COMPANY,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET
(in millions)
(unaudited)
March 31, December 31, 2016
2015
ASSETS
Cash and cash equivalents $ 50.1 $ 59.2 Trade receivables
489.6 451.3 Inventories 545.5 525.9 Prepaid expenses and other
current assets 79.4 82.6 Total current assets 1,164.6
1,119.0 Property and equipment, net 1,222.6
1,206.3 Goodwill 961.4 949.5 Other intangible
assets, net 147.8 149.8 Deferred charges and other assets 76.7
65.2 Total other long-term assets 1,185.9
1,164.5
TOTAL ASSETS $ 3,573.1 $
3,489.8
LIABILITIES
Current portion of long-term debt $ 0.6 $ 5.8 Short-term
borrowings 19.0 29.6 Accounts payable 366.9 334.8 Employee-related
liabilities 64.5 93.3 Accrued income and other taxes 47.2 35.2
Other current liabilities 66.6 90.4 Total current
liabilities 564.8 589.1 Long-term debt, less
current portion 1,437.2 1,353.9 Deferred taxes 178.5 172.4 Other
liabilities and deferred credits 160.2 167.0
TOTAL LIABILITIES 2,340.7 2,282.4
EQUITY
Common stock issued (128.8 and 128.2 shares, respectively)
12.9 12.8 Capital in excess of par value 566.9 573.2 Retained
earnings 2,244.4 2,216.0 Accumulated other comprehensive loss
(462.8 ) (509.9 ) Common stock held in treasury (34.1 and 33.1
shares at cost, respectively) (1,129.0 ) (1,084.7 )
TOTAL
EQUITY 1,232.4 1,207.4
TOTAL
LIABILITIES AND EQUITY $ 3,573.1 $ 3,489.8
BEMIS COMPANY,
INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(unaudited)
Three Months Ended March 31, 2016
2015
Cash flows from
operating activities
Net income $ 56.2 $ 54.4 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 40.8 39.7 Excess tax benefit from share-based payment
arrangements (4.2 ) (0.4 ) Share-based compensation 4.2 4.3
Deferred income taxes 4.4 (0.9 ) Income of unconsolidated
affiliated company (0.4 ) (0.5 ) Non-cash impairment charge of
discontinued operations — 3.2 Loss (gain) on sale of property and
equipment 1.6 (0.4 ) Changes in working capital, excluding effect
of acquisitions, divestitures and currency (55.2 ) (17.8 ) Changes
in other assets and liabilities 5.2 3.6 Net
cash provided by operating activities 52.6 85.2
Cash flows from
investing activities
Additions to property and equipment (30.6 ) (39.5 ) Proceeds from
sale of property and equipment 0.1 4.0 Net
cash used in investing activities (30.5 ) (35.5 )
Cash flows from
financing activities
Net repayment of long-term debt (23.4 ) — Net borrowing of
commercial paper 83.5 33.7 Net repayment of short-term debt (5.7 )
(1.8 ) Cash dividends paid to shareholders (32.1 ) (28.0 ) Common
stock purchased for the treasury (44.3 ) (37.5 ) Excess tax benefit
from share-based payment arrangements 4.2 0.4 Stock incentive
programs and related tax withholdings (14.6 ) (2.6 ) Net
cash used in financing activities (32.4 ) (35.8 ) Effect of
exchange rates on cash and cash equivalents 1.2 (0.7 )
Net (decrease) increase in cash and cash equivalents (9.1 )
13.2 Cash and cash equivalents balance at beginning of year
59.2 47.1 Cash and cash equivalents balance at
end of period $ 50.1 $ 60.3
BEMIS COMPANY,
INC. AND SUBSIDIARIES
OPERATING PROFIT
AND PRETAX PROFIT
(in millions)
(unaudited)
Three Months Ended March 31, 2016
2015 U.S. Packaging operating profit $
101.7 $ 95.4
Global Packaging: Operating profit
before restructuring and acquisition-related costs 16.3 29.3
Restructuring and acquisition-related costs (0.6 ) (5.0 ) Operating
profit 15.7 24.3 General corporate expenses (18.0 ) (22.3 )
Operating income 99.4 97.4 Interest expense
15.4 13.1 Other non-operating expense (income) 0.1
(1.8 )
Income from continuing operations before income
taxes $ 83.9 $ 86.1
BEMIS COMPANY,
INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP OPERATING PROFIT
(in millions)
(unaudited)
Three Months Ended March 31, 2016
2015 U.S. Packaging Net sales $ 660.5
$ 707.0 Operating profit as reported $ 101.7
$ 95.4 Operating profit return on sales
As reported
15.4 % 13.5 %
Global Packaging Net sales $ 307.4
$ 333.1 Operating profit as reported $ 15.7 $
24.3 Non-GAAP adjustments: Restructuring costs (1) — 5.0
Acquisition-related costs (2) 0.6 — Operating
profit as adjusted $ 16.3 $ 29.3 Operating
profit return on sales As reported 5.1 % 7.3 % As adjusted 5.3 %
8.8 % (1) Includes costs related to the plant closure in
Philadelphia, Pennsylvania (a healthcare packaging manufacturing
facility). (2) Acquisition-related costs are comprised of
acquisition costs associated with the Emplal Participações S.A.
acquisition.
BEMIS COMPANY,
INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP EARNINGS PER SHARE
(unaudited)
Three Months Ended March 31, 2016
2015 Continuing Operations Diluted
earnings per share, as reported $ 0.59 $ 0.58
Non-GAAP adjustments per share, net of
taxes:
Restructuring costs (1) — 0.03 Acquisition-related costs (2) 0.01
— Diluted earnings per share, as adjusted $ 0.60
$ 0.61 (1) Includes costs related to the plant
closure in Philadelphia, Pennsylvania (a healthcare packaging
manufacturing facility). (2) Acquisition-related costs are
comprised primarily of acquisition costs associated with the Emplal
Participações S. A. acquisition and were recorded both in operating
income and interest expense (reflecting fees to extinguish portions
of the seller's debt).
BEMIS COMPANY,
INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP RETURN ON INVESTED CAPITAL
(in millions)
(unaudited)
Quarter Ended
12 months endedMarch 31,
2016
March 31, 2016
December 31, 2015
September 30, 2015 June 30,
2015 Income from Continuing Operations Operating
income (EBIT) $ 99.4 $ 97.2 $ 105.8 $ 109.2 $ 411.6 Restructuring
and acquisition-related costs 0.8 2.2 4.6 0.3
7.9
Adjusted EBIT (Bemis Company Inc.)
(a) $ 100.2 $ 99.4 $ 110.4 $ 109.5
$ 419.5
Average Invested Capital1
(b) 2,585.9
Assumed tax rate2 (c) 35.0
%
Adjusted ROIC (a * (1 - c) / b) 10.5 %
Quarter
Ended
12 months endedMarch 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 and
acquisition-related 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 expense (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) 2,864.0
Assumed tax
rate2 (c) 35.0 %
Adjusted ROIC (a * (1 - c) /
b) 9.9 % 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/20160428005599/en/
Bemis Company Inc.Erin M. Winters,
920-527-5288Director of Investor Relations
Bemis (NYSE:BMS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Bemis (NYSE:BMS)
Historical Stock Chart
From Apr 2023 to Apr 2024