Bemis Company, Inc. (BMS)
Q2 2010 Earnings Call
July 27, 2010 10:00 AM ET
Melanie Miller – Vice President and Treasurer
Henry Theisen – President and Chief Executive Officer
Scott Ullem – Vice President and Chief Financial Officer
Ghansham Panjabi – Baird
Sara Magers – Wells Fargo
Mark Wilde – Deutsche Bank
Chris Manuel – KeyBanc Capital
Al Kabili – McGuire Investments
Claudia Hueston – JPMorgan.
James Armstrong – Credit Suisse.
Michael Hamilton – Royal Bank of Canada
David Raso – Citigroup.
George Staphos – Banc of America Merrill Lynch.
Mark Wilde – Deutsche Bank
Chip Dillon – Credit Suisse
Daniel Khoshaba – KSA Capital.
Previous Statements by BMS
» Bemis Company, Inc. Q1 2010 Earnings Call Transcript
» Bemis Company, Inc. Q4 2009 Earnings Call Transcript
» Bemis Co. Inc. Q3 2009 Earnings Call Transcript
Good day everyone, and welcome to the Bemis Second Quarter 2010 Earnings Release Conference Call. This call is being recorded. For opening remarks and introductions, I will now like to turn the call over to the Vice President and Treasurer of Bemis Company, Ms. Melanie Miller. Ms Miller, please go ahead.
Thank you, operator. Welcome to our second quarter 2010 conference call. Today is July 27th, 2010. A replay of this call will be available on our website, 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, and our Vice President and Chief Financial Officer, Scott Ullem.
Today, Henry will begin with his comments on operations followed by Scott with comments on financial results, 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, costs and integration risks associated with business combinations, interest rate fluctuations and regional economic conditions.
A more complete list of risk factors is included in our regular SEC filing including the most recently filed Form 10-K for the year ended December 31, 2009.
Now I'll turn the call over to Henry Theisen.
Henry J. Theisen
Thank you and good morning, everyone. I’m pleased to report that after five months the integration of our Food Americas acquisition is progressing well and ahead of schedule. The cultural integration has been smooth. Our business teams are now completely integrated and we are benefiting from best practices shared across our global businesses.
We have integrated the former Food Americas plants within the Bemis plant network using our focused factory strategy. Over time this will offer our business leaders opportunities to identify available capacity and rebalance production as needed to meet customer schedule.
We expect to realize tangible cost savings associated with these efforts beginning in 2011. In addition to the integration of plant operations, administrative sales and marketing functions we are taking the opportunity to reorganize our research and development functions to promote accelerated commercialization of new technologies and global product development efforts.
With the Food Americas acquisition we acquired a facility in Wisconsin that we now call the Bemis innovation center. In this location we're consolidating our R&D resources to create an improved model for developing innovative solutions for our core markets and expanding our polymer science expertise into new applications. This is an exciting change for Bemis and one that I’m confident will deliver value to our customers and our employees.
Convenience has remained an important feature in packaging, even through the economic downturn. Consumers want to maintain the quality and convenience that they have grown accustomed to. Let me highlight two examples of product categories that demonstrate this trend. Single-serve beverages and quick preparation meals.
Demand for individual single-serve coffee packages continue to grow as consumers opt for specialty coffee drink that they can make at home, at work and on the go. Powdered drink stick packs are also very popular in Latin America and have been gaining popularity in the United States.
Our customers have been aggressively launching quick preparation meals with which consumers can prepare meal for their family in 10 minutes or less. These products cross over several grocery categories, including shelf-stable, refrigerated and frozen foods.
Shelf-stable meals are gaining popularity as food companies introduce new products for busy families. Our new acquired retort technology offers an ideal solution for shelf-stable products like pasta and rice meals, baby food, and even pet food. Retort flexible packaging technology essentially offers the same food processing techniques used in canning in a flexible pouch, therefore offering a shelf-stable package to products that would normally require refrigeration.
Sandwich kits are also gaining popularity with consumers. These kits include all of the ingredients necessary to make a quality deli-style sandwich at work or on the go. They are available at both grocery stores and convenience stores. We are seeing continuing growth in microwaveable frozen vegetables that incorporate convenience features. These packages have to self-vent at the appropriate time such that the vegetables are uniformly steamed. They can include plain vegetables or vegetables with sauces in a standup pouch format that billboard well in the upright freezer displaces. Packages that include sauces need our unique proprietary film to withstand the higher temperatures generated by the oils in the sauces.