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TheStreet Open House

Bemis Company Reports 2012 First Quarter Results

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 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, unexpected costs associated with 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, 2011.

INVESTOR CONFERENCE CALL

Bemis Company, Inc. will webcast an investor telephone conference regarding its first quarter 2012 financial results this morning at 10 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. is a major supplier of flexible packaging and pressure sensitive materials used by leading food, consumer products, healthcare, and other companies worldwide. Founded in 1858, the Company is included in the S&P 500 index of stocks and reported 2011 net sales of $5.3 billion. The Company’s flexible packaging business has a strong technical base in polymer chemistry, film extrusion, coating and laminating, printing, and converting. Headquartered in Neenah, Wisconsin, Bemis employs approximately 20,000 individuals worldwide. More information about the Company is available at our website, www.bemis.com.

BEMIS COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(in thousands, except per share amounts)
(unaudited)
 
  Three Months Ended
March 31,
2012   2011
 
Net sales $1,304,822 $1,324,428
Cost of products sold 1,073,847   1,094,575  
 
Gross Profit 230,975 229,853
 
Operating expenses:
Selling, general, and administrative expenses 129,246 126,175
Research and development 10,903 7,587
Facility consolidation and other costs 8,348 -
Other operating (income) expense, net (6,035 ) (7,061 )
 
Operating Income 88,513 103,152
 
Interest expense 20,456 18,336
Other non-operating (income) expense, net 187   1,720  
 
Income before income taxes 67,870 83,096
 
Provision for income taxes 23,900   30,300  
 
Net income 43,970 52,796
 
Less: Net income attributable to noncontrolling interests -   1,586  
 
Net income attributable to Bemis Company, Inc. $43,970   $51,210  
 
Basic earnings per share $0.42   $0.47  
 
Diluted earnings per share $0.42   $0.47  
 
Cash dividends paid per share $0.25 $0.24
 
 
Weighted average shares outstanding (includes participating securities):
Basic 104,352 108,753
Diluted 104,982 109,106
             
 

BEMIS COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(dollars in thousands)
(unaudited)
         
  March 31,   December 31,

ASSETS

2012 2011
 
Cash and cash equivalents $112,985 $109,796
Accounts receivable, net 702,107 665,402
Inventories 681,271 646,058
Prepaid expenses and other current assets 134,722   127,755  
Total current assets 1,631,085   1,549,011  
 
Property and equipment, net 1,422,673   1,440,889  
 
Goodwill 1,055,641 1,048,469
Other intangible assets, net 219,373 222,475
Deferred charges and other assets 62,345   59,600  
Total other long-term assets 1,337,359   1,330,544  
 
TOTAL ASSETS $4,391,117   $4,320,444  
 

LIABILITIES

 
Current portion of long-term debt $13,052 $13,411
Short-term borrowings 2,733 1,740
Accounts payable 429,134 415,786
Accrued salaries and wages 98,124 95,774
Accrued income and other taxes 26,629 23,854
Other current liabilities 118,483   131,400  
Total current liabilities 688,155 681,965
 
Long-term debt, less current portion 1,552,168 1,554,750
Deferred taxes 181,790 175,585
Other liabilities and deferred credits 324,058   326,041  
 
TOTAL LIABILITIES 2,746,171   2,738,341  
 

EQUITY

 
Bemis Company, Inc. shareholders' equity:
Common stock issued (127,045,576 and 126,937,817 shares) 12,705 12,694
Capital in excess of par value 535,496 532,441
Retained earnings 1,850,371 1,832,893
Accumulated other comprehensive income (48,445 ) (90,744 )
Common stock held in treasury, 23,953,971 shares at cost (705,181 ) (705,181 )
TOTAL EQUITY 1,644,946   1,582,103  
 
TOTAL LIABILITIES AND EQUITY   $4,391,117     $4,320,444  
 

BEMIS COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)
(unaudited)
         
  Three Months Ended
March 31,
2012   2011

Cash flows from operating activities

Net income $43,970 $52,796

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 54,978 55,593
Excess tax (benefit) expense from share-based payment arrangements 203 (431 )
Share-based compensation 4,885 4,680
Deferred income taxes 2,371 6,416
Income of unconsolidated affiliated company (644 ) (823 )
Loss (gain) on sale of property and equipment (333 ) 780
Net facility consolidation and other activities 350 -
Changes in working capital, excluding effect of acquisitions (62,414 ) (132,516 )
Net change in deferred charges and credits 5,454   4,232  
 
Net cash provided by (used in) operating activities 48,820   (9,273 )
 

Cash flows from investing activities

Additions to property and equipment (23,677 ) (26,956 )
Business acquisitions and adjustments, net of cash acquired - (15,826 )
Proceeds from sale of property and equipment 1,298   658  
 
Net cash used in investing activities (22,379 ) (42,124 )
 

Cash flows from financing activities

Repayment of long-term debt (1,124 ) (91 )
Net borrowing (repayment) of commercial paper 4,500 133,300
Net borrowing (repayment) of short-term debt 993 89
Cash dividends paid to shareholders (26,086 ) (26,104 )
Common stock purchased for the treasury - (54,345 )
Purchase of subsidiary shares of noncontrolling interests - (380 )
Excess tax benefit (expense) from share-based payment arrangements (203 ) 431
Stock incentive programs and related withholdings (1,616 ) (3,457 )
 
Net cash (used in) provided by financing activities (23,536 ) 49,443  
 
Effect of exchange rates on cash and cash equivalents 284   (2,385 )
 
Net increase (decrease) in cash and cash equivalents 3,189 (4,339 )
 
Cash and cash equivalents balance at beginning of year 109,796   60,404  
 
Cash and cash equivalents balance at end of period   $112,985     $56,065  
 

BEMIS COMPANY, INC. AND SUBSIDIARIES

OPERATING PROFIT AND PRETAX PROFIT

(in millions)
(unaudited)
 
  Three Months Ended
March 31,
2012   2011
 
 
Flexible Packaging operating profit $116.2 $116.3
Flexible Packaging facility consolidation and other costs (8.3 ) -  
Net Flexible Packaging operating profit 107.9 116.3
 
Pressure Sensitive Materials operating profit 9.7   9.9  
 
Segment operating profit 117.6 126.2
 
General corporate expenses (29.1 ) (23.0 )
 
Operating income 88.5 103.2
 
Interest expense 20.5 18.3
 
Other non-operating (income) expense, net 0.1 1.8
   

Income before income taxes

  $67.9     $83.1  
 

BEMIS COMPANY, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP DATA

(in millions, except per share amounts)
(unaudited)
 
  Three Months Ended
March 31,
    2012   2011

Reconciliation of GAAP to Non-GAAP Operating Profit

 

and Operating Profit as a Percentage of Net Sales by Segment

 
Flexible Packaging
Net Sales $1,159.5   $1,179.4  
 
Operating Profit as reported 107.9 116.3
 
Non-GAAP adjustments:
Acquisition related integration costs (1) 1.7 -
Facility consolidation and other costs (2) 8.3 -
   
Operating Profit as adjusted $117.9   $116.3  
 
Operating Profit as a percentage of Net Sales
As Reported 9.3 % 9.9 %
As Adjusted 10.2 % 9.9 %
         
 
Pressure Sensitive Materials
Net Sales $145.3   $145.0  
 
Operating Profit as reported $9.7   $9.9  
 
Operating Profit as a percentage of Net Sales as reported 6.7 % 6.8 %
         

Reconciliation of GAAP to Non-GAAP

Earnings per Share
 
Diluted earnings per share, as reported $0.42 $0.47
 
Non-GAAP adjustments per share, net of taxes:
Acquisition related integration costs (1) 0.02 -
Facility consolidation and other costs (2) 0.05 -
   
Diluted earnings per share, as adjusted   $0.49     $0.47  
 

(1)

 

Acquisition related integration costs include earnout payments treated as compensation expense related to the Mayor Packaging acquisition.

(2)

Facility consolidation and other costs includes employee related costs, accelerated depreciation, and write down of equipment related to the company's facility consolidation program.

 





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