10.24.14
Bemis Company, Inc. reported third quarter 2014 diluted earnings per share from continuing operations of $0.61 per share, compared to $0.47 per share for the same quarter of 2013.
“Our record third quarter results reflect continued progress in the implementation of our long-term strategy,” said William Austen, Bemis Company’s president and CEO. “Our Global Packaging business delivered solid operating profit improvement, driven by our strong pricing discipline and unit volume growth in our high margin target end markets around the world. In our U.S. Packaging business, operating margins increased and we continued to commercialize new business awards. As we move forward, we are focused on further improving performance metrics through continued pricing discipline, capacity investments, and operational improvements that will deliver more efficient scale-up of our growth projects.”
U.S. Packaging net sales of $716.7 million for the third quarter of 2014 represented a decrease of 4.5%, compared to the same period of 2013. The first quarter 2014 divestiture of the Paper Packaging Division reduced sales by 5.6%. Excluding the impact of divestitures, the 1.1% increase in net sales reflects the benefit of increased selling prices and improved sales mix.
U.S. Packaging operating profit for the third quarter of 2014 was $95.3 million, or 13.3% of net sales, compared to $81.8 million, or 10.9% of net sales, in the same period of 2013. Operating profit results reflect the benefit of sales mix improvements and the adverse impact of costs and manufacturing inefficiencies related to the commercialization of new business.
Global Packaging net sales for the third quarter of 2014 of $381.5 million represented an increase of 2.9%, compared to the third quarter of 2013. Excluding the impact of currency translation, Global Packaging net sales increased 5.4% from the prior year, reflecting unit volume growth in addition to favorable sales price and mix.
Global Packaging operating profit for the third quarter was $32.9 million, or 8.6% of net sales, compared to $28.3 million, or 7.6% of net sales, for the same period in 2013. The net effect of currency translation decreased operating profit during the third quarter of 2014 by $1.0 million. Margin improvement in this segment reflects the favorable impact of increased sales of value-added packaging for medical device, pharmaceutical, and perishable food applications.
On Sept. 8, 2014, the company entered into an agreement to sell its Pressure Sensitive Materials business segment. Management expects the transaction to close during the fourth quarter of 2014.
Total company net debt to adjusted EBITDA was 2.1 times at Sept. 30, 2014, slightly above the target ratio of 2.0 times. Cash flow from operations for the quarter of $121.1 million compared to $160.0 million for third quarter of 2013, reflecting generally higher levels of working capital associated with higher raw material costs, increased inventory levels, and higher selling prices. These working capital increases support new product commercialization and strong customer demand for value-added products.
In anticipation of the sale of the Pressure Sensitive Materials business segment, management established new guidance for continuing operations. Management expects adjusted diluted earnings per share from continuing operations to be in the range of $0.53 to $0.58 for the fourth quarter and in the range of $2.26 to $2.31 for the full year 2014. Considering the results of discontinued operations, management’s new full year guidance range is consistent with the middle of its previously stated full year guidance range.
“Our record third quarter results reflect continued progress in the implementation of our long-term strategy,” said William Austen, Bemis Company’s president and CEO. “Our Global Packaging business delivered solid operating profit improvement, driven by our strong pricing discipline and unit volume growth in our high margin target end markets around the world. In our U.S. Packaging business, operating margins increased and we continued to commercialize new business awards. As we move forward, we are focused on further improving performance metrics through continued pricing discipline, capacity investments, and operational improvements that will deliver more efficient scale-up of our growth projects.”
U.S. Packaging net sales of $716.7 million for the third quarter of 2014 represented a decrease of 4.5%, compared to the same period of 2013. The first quarter 2014 divestiture of the Paper Packaging Division reduced sales by 5.6%. Excluding the impact of divestitures, the 1.1% increase in net sales reflects the benefit of increased selling prices and improved sales mix.
U.S. Packaging operating profit for the third quarter of 2014 was $95.3 million, or 13.3% of net sales, compared to $81.8 million, or 10.9% of net sales, in the same period of 2013. Operating profit results reflect the benefit of sales mix improvements and the adverse impact of costs and manufacturing inefficiencies related to the commercialization of new business.
Global Packaging net sales for the third quarter of 2014 of $381.5 million represented an increase of 2.9%, compared to the third quarter of 2013. Excluding the impact of currency translation, Global Packaging net sales increased 5.4% from the prior year, reflecting unit volume growth in addition to favorable sales price and mix.
Global Packaging operating profit for the third quarter was $32.9 million, or 8.6% of net sales, compared to $28.3 million, or 7.6% of net sales, for the same period in 2013. The net effect of currency translation decreased operating profit during the third quarter of 2014 by $1.0 million. Margin improvement in this segment reflects the favorable impact of increased sales of value-added packaging for medical device, pharmaceutical, and perishable food applications.
On Sept. 8, 2014, the company entered into an agreement to sell its Pressure Sensitive Materials business segment. Management expects the transaction to close during the fourth quarter of 2014.
Total company net debt to adjusted EBITDA was 2.1 times at Sept. 30, 2014, slightly above the target ratio of 2.0 times. Cash flow from operations for the quarter of $121.1 million compared to $160.0 million for third quarter of 2013, reflecting generally higher levels of working capital associated with higher raw material costs, increased inventory levels, and higher selling prices. These working capital increases support new product commercialization and strong customer demand for value-added products.
In anticipation of the sale of the Pressure Sensitive Materials business segment, management established new guidance for continuing operations. Management expects adjusted diluted earnings per share from continuing operations to be in the range of $0.53 to $0.58 for the fourth quarter and in the range of $2.26 to $2.31 for the full year 2014. Considering the results of discontinued operations, management’s new full year guidance range is consistent with the middle of its previously stated full year guidance range.