Bemis Company, Inc. (BMS)
Q1 2010 Earnings Call Transcript
April 29, 2010 10:00 am ET
Melanie Miller – VP, IR and Treasurer
Henry Theisen – President and CEO
Gene Wulf – SVP and CFO
Scott Ullem – VP, Finance
Ghansham Panjabi – Robert W Baird
Tim Thein – Citigroup
Chris Manuel – KeyBanc Capital Markets
Sara Magers – Wells Fargo Securities
Claudia Hueston – JP Morgan
Mike Hamilton – RBC Capital
Al Kabili – Macquarie
James Armstrong – Credit Suisse
Benjamin Wong – Bank of America
Joseph Naya – UBS
Previous Statements by BMS
» Bemis Company, Inc. Q4 2009 Earnings Call Transcript
» Bemis Co. Inc. Q3 2009 Earnings Call Transcript
» Bemis Co. Inc. Q2 2009 Earnings Call Transcript
Good day everyone, welcome to the Bemis first quarter 2010 earnings release conference call. This call is being recorded. For opening remarks and introductions, I will now turn the call over to the Vice President and Treasurer for Bemis Company, Ms Melanie Miller. Ms Miller, please go ahead.
Thank you operator. Welcome to our 2010 conference call today April 29, 2010. A replay of this call will be available on our Web site, www.bemis.com, under the Investor Relations section.
Joining me for this call today are Bemis Company's President and Chief Executive Officer, Henry Theisen; our Senior Vice President and Chief Financial Officer, Gene Wulf; and our Vice President of Finance, Scott Ullem. Today Henry will begin followed by Gene with comments on financial results, and then Scott will discuss cash flow and guidance.
After our comments, we will answer any questions you have. However, in order to allow everyone an opportunity to participate, we ask that you limit yourself to one question at a time with a related follow-up, and then fall back into the queue for any additional questions.
Before we begin, I'd like to remind everyone that statements regarding future performance of the company made in this teleconference are forward looking and are subject to certain risks and uncertainties. Actual results may differ materially from historical, expected or projected results due to a variety of factors,
including currency fluctuations, changes in raw material costs and availability, industry competition, unexpected consumer buying trends and customer order patterns, our ability to pass along increased costs in our selling prices, the timing of the sale of discontinued operations, costs and integration, risk associated with business combinations, interest rate fluctuations and regional economic conditions. A more complete list of risk factors is included in our regular SEC filings, including the most recently filed Form 10-K for the year ended December 31, 2009.
Now, I will turn the call over to Henry Theisen.
Good morning and thank you all for joining us today. I want to start off by saying how pleased we are with the business and talent that we have acquired. As I attend integration status and regular management meetings, I am thrilled at the enthusiasm in the combined organization and the opportunities identified by these leadership teams, to improve operations, utilize the combined technologies, and take Bemis to a higher level of service to our customers.
Moving forward, we are in a great position to grow the topline as well. Material science remains a catalyst for growth in our business with added expertise in our employee [ph] handling, crystalized polyester trays and retort packaging. We are also pleasantly surprised to find that our acquired business has more complementary technologies than we have previously recognized.
There are several examples of innovative Food Americas product developments that will benefit from Bemis technologies and vice versa. With this acquisition, we acquired an excellent technology centre in which we will house all of our R&D talent and technologies. This new Bemis innovation centre will be utilized to escalate the development of new products, integrate technology platforms within the new organization, and enhance our R&D efficiency to drive value for our customers. This integration will create and improve the opportunities for all Bemis operations to assess new technologies and expand the reach of our unique products to new market segments and new geographies.
With our strong customer relationships and expanded product reach, we are well positioned to deepen and broaden our strategic partnerships assisting customers to meet their growth objectives and ours. This means more opportunities to bring new ideas, new technologies, and new capabilities to the attention of these global foods, consumer products, and healthcare companies.
Additionally, we tend to grow geographically through our leading market position in Mexico and additional operations in Australasia. Again, all of these growth initiatives will take time to create positive momentum but we are positioning ourselves during this integration to promote an organizational structure that facilitates growth from every angle.
As we look across our expanded portfolio of plans, there are many areas of best practices that will be shared to improve each and every operation. Our business teams have already begun to look at optimizing production schedules and specifications between plans wherever possible. We expect these actions will improve profitability and efficiency.
Now, turning to the first quarter results, the first quarter generally starts slow, March to be one of the strongest months of the year as we prepare for the seasonally stronger second and third quarters. This year was no exception. We entered the quarter with good volume levels and a strong backlog heading into the second quarter.
The raw material cost environment has turned 180 degrees from where it was one year ago. In early 2009, we were experiencing declining raw material cost, and enjoying a short-term benefit from the lag in adjusting selling prices. Selling prices had absorbed most of the raw material cost changes by July and the second-half of 2009 was relatively quiet. In 2010, we are now facing increasing raw material cost and experiencing a short-term negative effect from the lag in adjusting selling prices.