Bemis Company, Inc.
) reported second-quarter 2013 adjusted earnings of 61 cents per
share, up 13% from 54 cents earned in the year-ago quarter. The
results beat the Zacks Consensus Estimate by a penny and were
within management's guidance range of 57 cents - 63 cents per
Including facility consolidation and acquisition-related
integration charges and gain on divestiture, earnings per share
in the reported quarter stood at 51 cents, up 27% from 40 cents
in the year-ago quarter. The year-ago quarter earnings included
facility consolidation and other costs and acquisitions related
Net sales slid 1.2% year over year to $1.297 billion, short of
the Zacks Consensus Estimate of $1.310 billion. Excluding the
impact of currency, net sales for the quarter declined 0.7% year
Cost of products sold decreased 3% to $1.045 billion in the
quarter. Gross profit increased 8% to $252 million. Gross margin
expanded 160 basis points to 19.4% in the quarter, the highest
level since 2009. Selling, general and administrative expenses
increased 6.5% to $132 million. Adjusted operating income rose 9%
to $108 million. Operating margin increased 80 basis points to
8.3% in the quarter.
Net sales from the U.S. Packaging segment amounted to $781
million, down 1% year over year reflecting the impact of the sale
of its Clysar thin gauge shrink film plant at the end of May as
part of Bemis' facility consolidation program. Excluding the
effect of the sale of the Clysar facility, net sales increased
modestly during the quarter, reflecting a net increase in unit
sales volume. However, adjusted segment operating profit
increased 12% to $101 million from $90 million, reflecting cost
savings associated with facility consolidation activities.
Net sales from the Global Packaging segment declined 2% to $374
million due to a weaker Brazilian currency and the impact of
closure of two plants in the fourth quarter of 2012. However, the
acquisition of Micris during the third quarter of 2012 increased
net sales by about 1.6%. Adjusted segment operating profit
declined 1.1% to $27.1 million due to the negative impact of
Net sales from the Pressure Sensitive Materials segment totaled
$142 million, flat year over year. Favorable currency
translation, higher unit sales of low margin label products in
the North American operations were offset by lower sales for
value-added graphic products from the European operations.
Segment operating profit was $6 million, down 45% from $10.9
million reported in the year-ago quarter due to weak results in
As of Jun 30, 2013, Bemis had cash and cash equivalents of $150
million, up from $114 million as of Dec 31, 2012. Total debt of
the company increased to $1.45 billion as of Jun 30, 2013 from
$1.42 billion as of Dec 31, 2012. The debt-to-capitalization
ratio increased to 47.8% as of Jun 30, 2013 from 46.5% as of Dec
Total cash flow from operating activities for the first half of
fiscal 2013 was $102 million compared with $143 million in the
In July, Bemis expanded its Asia-Pacific foothold with the
purchase of Foshan New Changsheng Plastics Films Co. (NCS).
Headquartered in China, Foshan New Changsheng Plastics Films is a
specialty film manufacturer. The acquisition is expected to have
no significant impact on Bemis' earnings results for 2013.
Incremental net sales from NCS are expected to be approximately
$60 million annually, and the acquisition of this film platform
is expected to provide cost and logistics benefits to support
Bemis' broader Asia-Pacific growth strategy.
Management expects volume levels in 2013 to be consistent with
2012, along with a generally stable raw material cost
environment. Management expects adjusted EPS in the range of 57
cents to 63 cents for the third quarter of 2013. For 2013, EPS is
projected to range between $2.30 and $2.40, a narrower range
compared to the previous guidance of $2.30 to $2.45 per
share. The upper end has been reduced to reflect the
expected impact of a weaker Brazilian currency and lower profits
in the pressure sensitive business for the second half of 2013.
The incremental savings of the facility consolidation activities
are expected to be around $37 million in 2013. Bemis expects cash
flow from operating activities to total approximately $430
million in 2013. The company reduced its guidance for capital
expenditures in 2013 to a range of $130 million to $140 million.
Weak volume, cautious consumer spending environment, sluggish
European economic outlook and rising food costs remain major
concerns. However, savings from the Bemis cost reduction program
due to the closure of unproductive facilities will help offset
Neenah, Wis.-based Bemis Company is a global manufacturer of
flexible packaging products and pressure sensitive materials sold
primarily to the food industry. The company also sells its
products to other customers in the chemical, agri-business,
medical, pharmaceutical, personal care, electronics, automotive,
construction, and graphic industries. Bemis currently carries a
Zacks Rank #3 (Hold).
Among the peers of Bemis Company,
Packaging Corporation of America
) posted second-quarter earnings per share of 71 cents, up 45%
from 49 cents in the year-earlier quarter and beat the Zacks
Consensus Estimate of 63 cents.
Graphic Packaging Holding Company
) reported earnings per share of 13 cents, an 18% year-over-year
increase, beating the Zacks Consensus Estimate by a penny.
Sonoco Products Co.
) reported second-quarter 2013 adjusted earnings of 59 cents per
share, beating the prior-year quarter's earnings and Zacks
Consensus Estimate by a penny.
BEMIS (BMS): Free Stock Analysis Report
GRAPHIC PKG HLD (GPK): Free Stock Analysis
PACKAGING CORP (PKG): Free Stock Analysis
SONOCO PRODUCTS (SON): Free Stock Analysis
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