Bemis Company, Inc. reported record second quarter 2014 diluted earnings of $0.65 per share, compared to $0.51 per share for the same quarter of 2013.
Net sales for the second quarter of 2014 totaled $1.2 billion. Excluding the impact of currency, acquisitions, and divestitures, net sales were consistent with the second quarter of 2013.
“I am very pleased with our strong operating performance during the second quarter,” said Henry Theisen, Bemis Company’s chairman and CEO. “We achieved our highest gross margin since 2009 as a result of our continued pricing discipline and improved sales mix. Our new product innovations have created positive momentum to support continued performance improvement through the second half of 2014.”
U.S. Packaging net sales of $725.8 million for the second quarter of 2014 represented a decrease of 7.1% compared to the same period of 2013. The divestitures of the Clysar business in 2013 and the Paper Packaging Division in 2014 reduced sales by 6.6%. The remaining 0.5% decrease in net sales primarily reflects lower volumes in less differentiated product categories. U.S. Packaging operating profit for the second quarter of 2014 was $101.0 million, or 13.9% of net sales, compared to $80.3 million, or 10.3% of net sales, in the same period of 2013. Excluding facility consolidation costs in 2013, segment adjusted operating profit would have been $101.5 million, or 13.0% of net sales.
Global Packaging net sales for the second quarter of 2014 of $371.8 million represented a decrease of 0.7% compared to the second quarter of 2013. Currency translation decreased net sales by 5.8%, primarily driven by the Brazilian Real.
The 2013 acquisition of the extrusion platform in Foshan, China increased net sales by 5.2%. Excluding the impact of currency translation and the acquisition, Global Packaging net sales were consistent with the prior year. Increased unit sales of healthcare packaging were partially offset by the impact of generally lower consumption levels in South America. Global Packaging operating profit for the second quarter was $26.6 million, or 7.2% of net sales, compared to $27.4 million, or 7.3% of net sales, for the same period in 2013.
The benefit of higher unit sales of value-added healthcare packaging was offset by the impact of generally lower unit sales of food packaging.
Pressure Sensitive Materials net sales totaled $144.0 million for the second quarter, a 1.6% increase from the same period in 2013. Currency translation increased net sales by 2.0% compared to the prior year. The remaining modest decrease in net sales reflects lower unit sales of roll label and technical products offset by higher sales of value-added graphics products.
Pressure Sensitive Materials operating profit for the second quarter was $9.8 million, or 6.8% of net sales, compared to $6.0 million, or 4.2% of net sales in 2013. The increase in adjusted operating profit during the period reflects improved global production efficiencies and cost control as well as the strengthening demand in Europe for value-added graphic products sold for advertising and promotional applications.
Net debt to adjusted EBITDA was 2.2 times at June 30, 2014, slightly above the target ratio of 2.0 times. Cash flow from operations for the quarter of $57.9 million compared to $94.0 million for second quarter of 2013, reflecting the cash payments associated with the closure of the Pressure Sensitive Materials plant and generally higher working capital levels.