Bemis Company Reports 4Q 2013, Full Year Results

Bemis Company, Inc. reported fourth quarter 2013 diluted earnings of $0.54 per share, compared to $0.38 per share for the same quarter of 2012.  Net sales for the fourth quarter 2013 were $1.2 billion, a decrease of 1.2 percent, primarily reflecting the impact of currency.

For the full year 2013, the company reported record diluted earnings per share of $2.04 compared to $1.66 per share for the full year 2012. Net sales in 2013 totaled $5.0 billion. Excluding the impact of currency, net sales for 2013 decreased by 0.8 percent as compared to 2012, reflecting the impact of recent plant closures.

“We achieved record earnings per share and strengthened our gross margins in 2013,” said Henry Theisen, Bemis Company’s chairman and CEO “We delivered on our strategy to achieve sustainable improvements in sales mix and optimized our footprint with the completion of our facility consolidation program. With the challenges of relocating production equipment behind us, we expect our future performance metrics to improve. As we begin 2014, we are experiencing positive sales momentum in our priority growth areas. We are investing in new capacity and product platforms that support our long-term growth plan and will deliver increased value to our shareholders.”

Adjusted diluted earnings per share for the full year 2013 of $2.28 increased 6.0 percent compared to the prior year. Gross profit as a percentage of net sales improved to 19.3 percent in 2013 compared to 18.4 percent in 2012.
Bemis established a film extrusion platform in Asia with the July 2013 acquisition of a China-based specialty film manufacturer. Cash flow from operations expected to exceed $500 million.

U.S. Packaging net sales of $3.0 billion for 2013 decreased 1.8 percent compared to 2012, reflecting the impact of plant closings and a divestiture, partially offset by the benefit of improved sales mix. U.S. Packaging operating profit for 2013 was $337.9 million, or 11.3 percent of net sales, compared to $366.7 million, or 12.1 percent of net sales, in 2012.  Facility consolidation program costs impacted results during each year.  Excluding these costs, segment adjusted operating profit for 2013 would have been $382.9 million, or 12.8 percent of net sales, compared to $408.8 million, or 13.4 percent of net sales, in 2012.

Global Packaging net sales for 2013 of $1.5 billion represented a decrease of 3.3 percent compared to the full year 2012. The impact of currency reduced net sales by 4.8 percent during the year. The impacts of plant closings and acquisitions approximately offset each other during the year. The remaining increase in Global Packaging net sales reflects the benefit of higher selling prices in 2013.

Operating profit from the Global Packaging business segment increased to $106.4 million during 2013, or 7.1 percent of net sales. This compares to $59.9 million, or 3.9 percent of net sales, for the full year 2012. Facility consolidation program and acquisition-related integration costs impacted operating profit results during both periods. Excluding these costs, segment adjusted operating profit for 2013 would have been $106.3 million, or 7.1 percent of net sales, compared to $91.1 million, or 5.9 percent of net sales, in 2012.  Operating profit  in 2012 was impacted by an unfavorable adjustment of $16.4 million related to the harmonization of certain accounting practices in connection with the enterprise resource planning system implementation mentioned above.

Pressure Sensitive Materials net sales totaled $553.2 million for 2013, a modest decrease from 2012.  The benefits of currency increased net sales by 1.1 percent. Lower unit sales of value-added graphic products negatively impacted sales mix during the year.

Pressure Sensitive Materials operating profit for 2013 was $30.0 million, or 5.4 percent of net sales, compared to $37.1 million, or 6.7 percent of net sales in 2012.  Lower operating profits during the year reflect lower unit sales of value-added graphic products sold primarily in Europe for advertising and promotional applications.

Cash flow from operations of $373.2 million for 2013 supported an increased dividend of $107.5 million, $77.3 million of share repurchases, $139.8 million in capital expenditures, and an acquisition to expand Bemis’ Asia-Pacific flexible packaging footprint.

Commenting on the year ahead, Theisen stated, “We are aggressively managing our business to improve earnings and position ourselves for long-term growth. In 2014, we will pursue platforms that will support long-term growth in high barrier products, in medical and pharmaceutical packaging, and in modern packaging solutions for developing geographies.”