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Bemis Company Reports 2012 First Quarter Results

Diluted earnings per share for the first quarter of 2012 was $0.42 compared to $0.47 per share reported in the same quarter of 2011. Excluding the effect of acquisition-related integration costs and facility consolidation costs, as detailed in the attached schedule, “Reconciliation of Non-GAAP Data,” diluted earnings per share, as adjusted, would have been $0.49 for the first quarter of 2012.

FACILITY CONSOLIDATION

During the fourth quarter of 2011, Bemis initiated a facility consolidation program to improve efficiencies and reduce fixed costs. As a part of this program, Bemis announced the planned closure of five facilities and the intent to move most of the production from these facilities to other Bemis operations. These facility consolidation activities are expected to save approximately $40 million in annualized costs beginning in 2013.

Highlights of the facility consolidation program:

  • Total facility consolidation program cost is expected to be $83 million
    • $38.4 million expensed in 2011 ($26.3 million of employee costs; $12.1 million of fixed asset-related expenses)
    • $8.3 million expensed in the first quarter of 2012 ($1.2 million of employee costs; $7.1 million of fixed asset-related expenses)
    • Most of the remaining charges are expected to occur during 2012
  • Total cash paid for the program is expected to be approximately $52 million
    • $3.3 million paid in the fourth quarter of 2011
    • $8.0 million paid in the first quarter of 2012
    • $24 million expected to be paid during the remainder of 2012
    • Remaining cash expenditures are expected to be paid in 2013

FLEXIBLE PACKAGING BUSINESS SEGMENT

Net sales for Bemis’ flexible packaging business segment decreased 1.7 percent to $1.2 billion compared to the first quarter of 2011. The impact of currency translation reduced net sales by 1.5 percent compared to the previous year. Bemis estimates that acquisitions completed during the second half of 2011 increased net sales by 1.8 percent. The remaining reduction in sales principally represents the negative impact of lower unit sales volumes. Segment operating profit for the first quarter of 2012 was $107.9 million, or 9.3 percent of net sales, compared to $116.3 million, or 9.9 percent of net sales, for the same period of 2011. During the first quarter of 2012, acquisition-related integration costs and facility consolidation costs negatively impacted results. Segment operating profit, as adjusted, for the first quarter of 2012 would have been $117.9 million, or 10.2 percent of net sales. (See attached schedule: “Reconciliation of Non-GAAP Data.”) The effect of currency translation decreased operating profit in the first quarter of 2012 by $1.3 million compared to the same quarter of 2011. Performance for the quarter reflects the benefits of cost reductions partially offset by the negative impact of lower unit sales volumes.

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