Bemis Company, Inc. (NYSE:BMS) today reported third quarter 2013 diluted earnings of $0.52 per share on net sales of $1.3 billion. Excluding the effect of facility consolidation costs and the gain on sale of property detailed in the attached schedule, “Reconciliation of Non-GAAP Earnings Per Share”, adjusted diluted earnings per share would have been $0.60 for the third quarter of 2013, consistent with the third quarter of 2012. Excluding the impact of currency, net sales for the quarter decreased by less than one percent compared to the third quarter of 2012.
“This quarter’s performance demonstrates the success of our strategy to improve sales mix and strengthen our return metrics,” said Henry Theisen, Bemis Company’s Chairman and Chief Executive Officer. “We improved our gross margin to the highest level since 2009. Our U.S. Packaging segment maintained its healthy 2013 operating margin in spite of lower unit sales volume and higher than expected costs related to the transition of production equipment from recently closed facilities. Excluding currency translation, our Global Packaging segment achieved a 20 percent increase in operating profit driven by improved price/mix in our Latin American operations and improved unit volumes in our European flexible packaging operations. Performance in our Pressure Sensitive Materials segment has stabilized at operating margin levels consistent with last year. Our adjusted guidance for 2013 reflects the negative impact of currency translation, the lack of anticipated sales growth in the second half of the year, and the higher production equipment transition costs that are expected to end during the fourth quarter.”
HIGHLIGHTS OF THE THIRD QUARTER OF 2013:
ACQUISITION OF CHINA-BASED FILM PLATFORM
- Adjusted diluted earnings per share of $0.60 was in line with the previous year and consistent with the management’s guidance for the quarter (See attached schedule, “Reconciliation of Non-GAAP Earnings Per Share.”)
- Net sales decreased by 2.3 percent to $1.3 billion, reflecting the net benefit of improved price/mix over generally lower unit sales volumes, which was more than offset by the negative impact of currency translation and the reduction of certain low margin sales in conjunction with the facility consolidation program.
- Gross profit as a percentage of net sales improved to 19.7 percent compared to 19.2 percent in the third quarter of 2012.
- Cash flow from operations totaled $160 million, an 8.9 percent improvement from the third quarter of last year.
- Bemis established a film extrusion platform in Asia with the acquisition of a China-based specialty film manufacturer on July 1, 2013.
- Management established adjusted diluted earnings guidance for the fourth quarter of 2013 in the range of $0.50 to $0.56 per share, updating total year 2013 earnings guidance to the range of $2.24 to $2.30 per share.
On July 1, 2013, Bemis acquired Foshan New Changsheng Plastics Films Co., LTD ("NCS"), a specialty film manufacturer located in Foshan, China. NCS is a supplier to Bemis' food packaging plant in Dongguan, China and other specialty film product customers. The acquisition is expected to be neutral to Bemis' earnings results for 2013. Incremental net sales from NCS are expected to be approximately $60 million annually, and the acquisition of this film platform is expected to provide cost and logistics benefits to support Bemis' broader Asia-Pacific growth strategy.