<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 1993
Commission File Number 0-1387
BEMIS COMPANY, INC.
(Exact name of registrant as specified in its charter)
Missouri 43-0178130
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
222 South 9th Street, Suite 2300, Minneapolis, Minnesota 55402-4099
(Address of principal executive offices)
Registrant's telephone number, including area code (612) 376-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common stock New York Stock Exchange
Par Value $.10 Per Share
(51,201,326 shares outstanding
as of December 31, 1993)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of
1934 during the preceding 12 months and has been subject to such filing
requirements for the past 90 days.
YES X NO
---- ----
Aggregate market value of the voting
stock held by non-affiliates of the registrant:
51,211,326 shares @ $22.00 per share as of March 14, 1994 - $1,126,649,000
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
1993 Annual Report to Shareholders - Part I and Part II
Proxy Statement - Annual Meeting of Stockholders -
May 5, 1994 - Part I and Part III
<PAGE>
ITEM 1 - BUSINESS
Bemis Company, Inc., a Missouri corporation, continues a business formed
in 1858. The Registrant was incorporated in 1885 as Bemis Bro. Bag Company with
the name changed to Bemis Company, Inc. in 1965.
The Registrant is a principal manufacturer of flexible packaging products
and specialty coated and graphics products. Information about the Registrant's
operations in different business segments appearing on pages 38 and 39 of the
the accompanying 1993 Annual Report to Shareholders is incorporated by reference
in this Form 10-K Annual Report.
As of December 31, 1993, the Registrant had approximately 7,600 employees,
of which an estimated 5,100 were classified as production employees. Most of
the production employees are covered by collective bargaining contracts
involving six different international unions and 22 individual contracts with
terms ranging from three to five years. During 1993, six contracts covering
approximately 800 employees at six different locations in the United States were
successfully negotiated. During 1994, seven labor agreements are scheduled to
expire.
Working capital elements throughout the year fluctuate in relation to the
level of business. Customer and vendor payment terms are generally net 30 days;
exceptions to these terms are not material. Inventory levels reflect a
reasonable balance between raw material pricing and availability, and our
commitment to promptly fill customer orders.
Backlogs are not a significant factor in the industries in which the
Registrant operates; most orders placed with the Registrant are for delivery
within 90 days or less.
The Registrant owns patents, licenses, trademarks, and trade names on its
products. The loss of any or all patents, licenses, trademarks, or trade names
would not have a materially adverse effect on the Registrant's results as a
whole or either of its segments. The business of each of the segments is not
seasonal to any
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<PAGE>
significant extent. A summary of the Registrant's business activities reported
by its two business segments follows:
FLEXIBLE PACKAGING PRODUCTS - The Registrant and its subsidiaries manufacture a
broad range of industrial and consumer packaging comprised of coated and
laminated films, polyethylene packaging, packaging machinery, multiwall and
consumer-size paper packaging and specialty containers.
Coated and laminated film packaging includes extruding, coating, laminating,
metallizing, printing and converting to perishable and frozen food packaging,
and products such as stretch film and carton sealing tape. Coated and laminated
films accounted for 32%, 32% and 31%, of consolidated net sales for the years
1993, 1992 and 1991, respectively.
Polyethylene packaging products include extruded products, printed roll stock
and pre-formed bags. Polyethylene products accounted for 16%, 10% and 9% of
consolidated net sales for the years 1993, 1992 and 1991, respectively.
Packaging machinery includes the manufacture of packaging systems for an
extensive list of consumer and industrial products ranging from toilet tissue,
candy and frozen vegetables to fertilizer, insulation materials, detergent and
pharmaceutical products. Packaging machinery accounted for 9%, 9% and 9% of
consolidated net sales for the years 1993, 1992 and 1991, respectively.
Multiwall and consumer-size paper bags are produced for a wide range of
industrial and consumer packaging products such as seed, feed, flour, cement and
chemicals, and small consumer-size packages for such products as sugar, flour,
rice and petfood. Sales of this product line accounted for 17%, 16% and 17% of
consolidated net sales for the years 1993, 1992 and 1991, respectively.
- 3 -
<PAGE>
SPECIALTY COATED AND GRAPHICS PRODUCTS - The Registrant manufactures pressure-
sensitive materials which includes a full line of industrial adhesive products
for mounting and bonding, quality roll label and sheet print stocks for numerous
applications including packaging labels, and a line of highly specialized
laminates for graphics and photography. Pressure-sensitive materials accounted
for 24%, 27% and 25% of consolidated net sales for the years 1993, 1992 and
1991, respectively. This product segment also includes the manufacture of
pressure-sensitive label applicating equipment, rotogravure cylinders and film
services.
MARKETING, DISTRIBUTION AND COMPETITION
While the Registrant's sales are made through a variety of distribution
methods, more than 70% of each segment's sales are made by the Registrant's
sales force. Sales offices and plants are located throughout the United States,
Canada, Great Britain, Europe and Scandinavia to provide prompt and economical
service to more than 30,000 customers. The highly technical sales force is
supported by product development engineers, design technicians and a customer
service organization.
No single customer accounts for 10% or more of the Registrant's total
sales of either of its two business segments. Furthermore, the loss of one or a
few major customers would not have a material adverse effect on their operating
results.
The major markets in which the Registrant sells its products are highly
competitive. Areas of competition include price, innovation, quality and
service. This competition is significant as to both the size and number of
competing firms.
Major competitors in the Flexible Packaging Products segment include
American National Can, Printpack, James River, Cryovac, Huntsman Chemical, AEP
Industries, Stone Container and Union Camp. In the Specialty Coated and
Graphics Products segment major competitors include Avery-Dennison, Flexcon,
Minnesota Mining and Manufacturing, Jackstadt (Germany) and Haarla (Finland).
- 4 -
<PAGE>
The Registrant considers itself to be a significant factor in the market niches
it serves; however, due to the diversity of the Flexible Packaging and Specialty
Coated and Graphics Products segments, the Registrant's precise competitive
position in these markets is not reasonably determinable.
Advertising is limited primarily to business and trade publications, and
emphasizes our packaging and related capabilities and the individual problem-
solving approach to customer problems.
RAW MATERIALS
Plastic resins, paper and chemicals constitute the basic major raw
materials. These are purchased from a variety of industry sources. While
temporary shortages of raw materials may occur occasionally, these items are
currently readily available.
RESEARCH AND DEVELOPMENT EXPENSE
Research and development expenditures were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Flexible Packaging Products $ 9,910,000 $10,791,000 $ 8,214,000
Specialty Coated and Graphics Products 4,174,000 5,148,000 5,009,000
---------- ---------- ----------
Total $14,084,000 $15,939,000 $13,223,000
---------- ---------- ----------
</TABLE>
ENVIRONMENT CONTROL
Compliance with federal, state and local provisions which have been
enacted or adopted regulating discharges of materials into the environment, or
otherwise relating to the protection of the environment is not expected to have
a material effect upon the capital expenditures, earnings and competitive
position of the Registrant and its subsidiaries.
ITEM 2 - PROPERTIES
Properties utilized by the Registrant and its subsidiaries at December 31,
1993, were as follows:
- 5 -
<PAGE>
FLEXIBLE PACKAGING PRODUCTS - The Registrant has 33 manufacturing plants of
which seven are leased, located in 17 states and two foreign countries. Leases
generally provide for minimum terms of two to 45 years and have one or more
five-year renewal options. The initial terms of leases in effect at December
31, 1993, expire between 1994 and 2009.
SPECIALTY COATED AND GRAPHICS PRODUCTS - The Registrant has nine manufacturing
plants of which three are leased, located in four states and three foreign
countries. Leases generally provide for minimum terms of five to 25 years and
have one or more renewal options. The initial terms of leases in effect as of
December 31, 1993, expire between 1996 and 2008.
CORPORATE - The executive offices of the Registrant, which are leased, are
located in Minneapolis, Minnesota.
The Registrant considers its plants and other physical properties to be
suitable, adequate and of sufficient productive capacity to meet the
requirements of its business. The manufacturing plants operate at varying
levels of capacity depending on the type of operation and market conditions.
ITEM 3 - LEGAL PROCEEDINGS
The Registrant is involved in a number of lawsuits, including superfund
litigation, incidental to its business. None of the litigation is material to
the Registrant, and the Registrant is not aware of any pending or threatened
litigation that is likely to have a material adverse affect upon the
Registrant's business, operating results or financial condition. The Registrant
is a potentially responsible party (PRP) in approximately twenty superfund sites
around the United States. At over one half of these sites the Registrant has
full insurance protection. At a majority of the remaining sites the Registrant
is a "de minimis" PRP and has negotiated a position as such. In all cases in
which the Registrant is uninsured or where insurance coverage is in dispute, the
Registrant has reserved an amount that it believes to be adequate to cover its
exposure.
- 6 -
<PAGE>
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDERS MATTERS
The information required by this item appearing on pages 1 and 22 of the
accompanying 1993 Annual Report to Shareholders is incorporated by reference in
this Form 10-K Annual Report.
ITEM 6 - SELECTED FINANCIAL DATA
The information required by this item appearing on page 23 of the
accompanying 1993 Annual Report to Shareholders is incorporated by reference in
this Form 10-K Annual Report.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by this item appearing on pages 19 to 22 of the
accompanying 1993 Annual Report to Shareholders is incorporated by reference in
this Form 10-K Annual Report.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements, together with the report thereon of Price
Waterhouse dated January 24, 1994, and quarterly data appearing on pages 24 to
39 of the accompanying 1993 Annual Report to Shareholders are incorporated by
reference in this Form 10-K Annual Report. With the exception of the
aforementioned information and the information incorporated in items 1, 5, 6, 7
and 8, the 1993 Annual Report to Shareholders is not to be deemed filed as part
of this Form 10-K Annual Report.
ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None
- 7 -
<PAGE>
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information on directors is omitted because the Registrant will have filed
with the Commission a definitive proxy statement pursuant to Regulation 14A
within 120 days after December 31, 1993.
The following sets forth the name, age and business experience for the
last five years of the principal executive officers of the Registrant. Unless
otherwise noted, each officer has been an employee of the Registrant for the
last five years and the positions described relate to positions with the
Registrant.
<TABLE>
<CAPTION>
Period
the Positions
Name Age Positions Held Were Held
- -------------------- --- ------------------------------------- ---------------
<S> <C> <C> <C>
LeRoy F. Bazany 61 Vice President and Controller 1982 to present
Jeffrey H. Curler 43 Executive Vice President 1991 to present
President - Curwood, Inc. (1) 1982 to 1991
Benjamin R. Field, III 55 Senior Vice President, Chief
Financial Officer and Treasurer 1992 to present
Vice President and Treasurer 1982 to 1992
Scott W. Johnson 53 Senior Vice President, General
Counsel and Secretary 1992 to present
Vice President - General Counsel
and Secretary 1988 to 1992
Robert F. Mlnarik 52 Executive Vice President 1991 to present
President and Chief Executive
Officer - Morgan Adhesives Co. (2) 1986 to 1991
John H. Roe 54 President and Chief Executive Officer 1990 to present
President and Chief Operating Officer 1987 to 1990
Executive Vice President 1983 to 1987
Lawrence E. Schwanke 53 Vice President - Human Resources 1990 to present
Director Personnel - Industrial Relations 1985 to 1990
<FN>
(1) Curwood, Inc. is a 100% owned subsidiary of the Registrant.
(2) Morgan Adhesives Co. is 86.9% owned subsidiary of the Registrant.
</TABLE>
- 8 -
<PAGE>
ITEM 11 - MANAGEMENT REMUNERATION
The information required by this item is omitted because the Registrant
will have filed with the Commission a definitive proxy statement pursuant to
Regulation 14A within 120 days after December 31, 1993.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is omitted because the Registrant
will have filed with the Commission a definitive proxy statement pursuant to
Regulation 14A within 120 days after December 31, 1993.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is omitted because the Registrant
will have filed with the Commission a definitive proxy statement pursuant to
Regulation 14A within 120 days after December 31, 1993.
- 9 -
<PAGE>
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of the report:
<TABLE>
<CAPTION>
Pages in
Annual Report*
-------------
<C> <S> <C>
(1) FINANCIAL STATEMENTS:
Report of Independent Accountants . . . . . . . . 24
Consolidated Statement of Income for
the Three Years Ended December 31, 1993 . . . . . 25
Consolidated Balance Sheet
at December 31, 1993 and 1992. . . . . . . . . 26, 27
Consolidated Statement of Cash Flows for
the Three Years Ended December 31, 1993 . . . . . 28, 29
Consolidated Statement of Stockholders' Equity
for the Three Years Ended December 31, 1993 . . . . 30
Notes to Consolidated Financial Statements . . . . . 31 to 39
<FN>
*Incorporated by reference from the indicated
pages of the 1993 Annual Report to Shareholders.
<CAPTION>
Pages in
Form 10-K
(2) FINANCIAL STATEMENT SCHEDULES FOR YEARS 1993, 1992 AND 1991
Report of Independent Accountants on Financial Statement
Schedules for the Three Years Ended December 31, 1993 . 12
Schedule V - Property and Equipment . . . . . . . . 14, 15
Schedule VI - Accumulated Depreciation
of Property and Equipment . . . . . . 16, 17
Schedule VIII - Valuation and Qualifying
Accounts and Reserves. . . . . . . 18
Schedule X - Supplementary Income Statement Information . 19
</TABLE>
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
- 10 -
<PAGE>
(3) Exhibits
13. 1993 Annual Report to Shareholders
22. Subsidiaries of the Registrant
All other exhibits are omitted because they are not applicable
or the required information is shown in the financial
statements or notes thereto.
(b) There were no reports on Form 8-K filed during the fourth quarter
ended December 31, 1993.
- 11 -
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors
of Bemis Company, Inc.
Our audits of the consolidated financial statements referred to
in our report dated January 24, 1994, appearing on page 24 of the 1993
Annual Report to Shareholders of Bemis Company, Inc. (which report and
consolidated financial statements are incorporated by reference in this
Annual Report on Form 10-K) also included an audit of Financial Statement
Schedules listed in Item 14(a) of this Form 10-K. In our opinion, these
Financial Statement Schedules present fairly, in all material respects,
the information set forth therein when read in conjunction with the
related consolidated financial statements.
Price Waterhouse
PRICE WATERHOUSE
Minneapolis, Minnesota
January 24, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of the Registration Statement on Form S-8
(number 2-61796) of Bemis Company, Inc. of our report dated January 24,
1994, appearing on page 24 of the Annual Report to Shareholders which
is incorporated in this Annual Report on Form 10-K. We also consent to
the incorporation by reference of our report on the Financial Statement
Schedules which appears above.
Price Waterhouse
PRICE WATERHOUSE
Minneapolis, Minnesota
March 14, 1994
- 12 -
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BEMIS COMPANY, INC.
Benjamin R. Field, III By LeRoy F. Bazany
- ---------------------------------- ------------------------------
Benjamin R. Field, III, Senior LeRoy F. Bazany, Vice
President
Vice President, Chief Financial and Controller
Officer and Treasurer
Date March 18, 1994 Date March 18, 1994
----------------------------- ---------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Howard Curler Edward W. Asplin
- ---------------------------------- -------------------------------
Howard Curler, Director Edward W. Asplin, Director
Date March 18, 1994 Date March 18, 1994
----------------------------- --------------------------
John H. Roe E. Thomas Binger
- ---------------------------------- -------------------------------
John H. Roe, President and Chief E. Thomas Binger, Director
Executive Officer; Director
Date March 18, 1994 Date March 18, 1994
----------------------------- --------------------------
Robert A. Greenkorn Robert F. Zicarelli
- ---------------------------------- -------------------------------
Robert A. Greenkorn, Director Robert F. Zicarelli, Director
Date March 18, 1994 Date March 18, 1994
----------------------------- --------------------------
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<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
------------------------------------
SCHEDULE V - PROPERTY AND EQUIPMENT
-----------------------------------
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1993
-------------------------------------------------------------------------------------------
Deductions
-------------------------
Additions at Cost Other
------------------ Fully Changes Translation
Balance at Business Depreciated Debit Adjustment Balance at
Beginning Acquisi- Retirements Assets (Credit) Debit Close
Of Year Normal tion or Sales Written Off (1) (Credit) of Year
--------- ------- -------- ----------- ----------- -------- ---------- ----------
OWNED PROPERTY AND EQUIPMENT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Land and land improvements $ 11,815 $ 627 $ 393 $ 524 $ 351 $ (60) $ 11,900
Buildings 140,877 5,706 4,382 5,894 227 (2,061) 142,783
Leasehold improvements 2,531 120 684 184 (14) 1,769
Machinery and equipment 504,530 54,276 26,266 36,111 28,969 662 (4,800) 515,854
-------- ------- ------- ------- ------- ------- -------- --------
$659,753 $60,729 $31,041 $43,213 $29,731 $ 662 $(6,935) $672,306
-------- ------- ------- ------- ------- ------- -------- --------
-------- ------- ------- ------- ------- ------- -------- --------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 4,262 $ 4,262
Machinery and equipment 1,900 757 (1,001) (79) 63
-------- -------- ------- -------- --------
$ 6,162 $ 757 $(1,001) $ (79) $ 4,325
-------- -------- ------- -------- --------
-------- -------- ------- -------- --------
(1) Reclassifications.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
------------------------------------
SCHEDULE V - PROPERTY AND EQUIPMENT
-----------------------------------
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1992
---------------------------------------------------------------------------------------
Deductions
------------------------ Other
Fully Changes Translation
Balance at Additions Depreciated Debit Adjustment Balance
Beginning at Cost Retirements Assets (Credit) Debit at Close
OWNED PROPERTY AND EQUIPMENT of Year Normal or Sales Written Off (1) (Credit) of Year
--------- --------- ----------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Land and land improvements $ 12,785 $ 214 $ 209 $ 45 $ (906) $ (24) $ 11,815
Buildings 130,733 10,623 959 466 1,094 (148) 140,877
Leasehold improvements 2,825 244 121 (415) (2) 2,531
Machinery and equipment 462,284 59,607 1,501 14,003 (13) (1,844) 504,530
-------- ------- ------- ------- -------- -------- --------
$608,627 $70,688 $ 2,669 $14,635 $ (240) $(2,018) $659,753
-------- ------- ------- ------- -------- -------- --------
-------- ------- ------- ------- -------- -------- --------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 4,262 $ 4,262
Machinery and equipment 1,979 16 111 16 1,900
-------- ------- ------- -------- --------
$ 6,241 $ 16 $ 111 $ 16 $ 6,162
-------- ------- ------- -------- --------
-------- ------- ------- -------- --------
<FN>
(1) Reclassifications and correction of prior year capitalization.
<CAPTION>
YEAR ENDED DECEMBER 31, 1991
----------------------------------------------------------------------------------------
OWNED PROPERTY AND EQUIPMENT
Land and land improvements $ 11,706 $ 1,206 $ 57 $ 35 $ (35) $ 12,785
Buildings 123,485 9,920 323 750 (175) (1,424) 130,733
Leasehold improvements 2,228 1,632 716 438 136 (17) 2,825
Machinery and equipment 453,859 44,189 11,695 18,830 (2,516) (2,723) 462,284
-------- ------- ------- ------- -------- -------- --------
$591,278 $56,947 $12,791 $20,053 $(2,555) $(4,199) $608,627
-------- ------- ------- ------- -------- -------- --------
-------- ------- ------- ------- -------- -------- --------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 4,262 $ 4,262
Machinery and equipment 2,137 95 (63) 1,979
-------- ------- -------- --------
$ 6,399 $ 95 $ (63) $ 6,241
-------- ------- -------- --------
-------- ------- -------- --------
(1) Reclassifications $ 309
Foreign government subsidiary 2,246
--------
$ 2,555
--------
--------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
------------------------------------
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY AND EQUIPMENT
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1993
----------------------------------------------------------------------------------
Deductions
---------------------- Other
Fully Changes Translation
Balance at Charged to Depreciated Debit Adjustment Balance
Beginning Profit Retirements Assets (Credit) Debit at Close
of Year and Loss or Sales Written Off (1) (Credit) of Year
--------- ---------- ----------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
OWNED PROPERTY AND EQUIPMENT
Land improvements $ 2,259 $ 243 $ 48 $ 351 $ 3 $ 2,100
Buildings 38,434 4,274 2,787 227 783 38,911
Leasehold improvements 713 211 249 184 6 485
Machinery and equipment 231,190 41,240 22,749 28,969 (208) 2,136 218,784
-------- ------- ------- ------- ------ ------ --------
$272,596 $45,968 $25,833 $29,731 $(208) $2,928 $260,280
-------- ------- ------- ------- ------ ------ --------
-------- ------- ------- ------- ------ ------ --------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 1,291 $ 126 $ 1,417
Machinery and equipment 1,298 127 757 547 75 46
-------- ------- ------- ------ ------ --------
$ 2,589 $ 253 $ 757 $547 $ 75 $ 1,463
-------- ------- ------- ------ ------ --------
-------- ------- ------- ------ ------ --------
<FN>
(1) Reclassifications.
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
------------------------------------
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY AND EQUIPMENT
----------------------------------------------------------------
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1992
---------------------------------------------------------------------------------
DEDUCTIONS
------------------------- Other
Fully Changes Translation
Balance at Charged to Depreciated Debit Adjustment Balance
Beginning Profit Retirements Assets (Credit) Debit at Close
OWNED PROPERTY AND EQUIPMENT of Year and Loss or Sales Written Off (1) (Credit) of Year
---------- ---------- ----------- ----------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Land improvements $ 2,064 $ 247 $ 45 $ 7 $ 2,259
Buildings 34,871 4,190 173 466 (99) 87 38,434
Leasehold improvements 732 204 121 99 3 713
Machinery and equipment 205,021 42,255 996 14,003 13 1,074 231,190
-------- ------- ------ ------- ----- ------ --------
$242,688 $46,896 $1,169 $14,635 $ 13 $1,171 $272,596
-------- ------- ------ ------- ----- ------ --------
-------- ------- ------ ------- ----- ------ --------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 1,166 $ 125 $ 1,291
Machinery and equipment 1,158 244 111 (7) 1,298
-------- ------- ------- ------- --------
$ 2,324 $ 369 $ 111 $ (7) $ 2,589
-------- ------- ------- ------- --------
-------- ------- ------- ------- --------
YEAR ENDED DECEMBER 31, 1991
----------------------------------------------------------------------------------
OWNED PROPERTY AND EQUIPMENT
Land improvements $ 1,856 $ 253 $ 10 $ 35 $ 2,064
Buildings 32,346 3,867 191 750 2 399 34,871
Leasehold improvements 1,480 226 531 438 (2) 7 732
Machinery and equipment 189,619 41,015 5,735 18,830 309 739 205,021
-------- ------- ------ ------- ----- ------ --------
$225,301 $45,361 $6,467 $20,053 $ 309 $1,145 $242,688
-------- ------- ------ ------- ----- ------ --------
-------- ------- ------ ------- ----- ------ --------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 1,042 $ 124 $ 1,166
Machinery and equipment 946 242 30 1,158
-------- ------- ------ --------
$ 1,988 $ 366 $ 30 $ 2,324
-------- ------- ------ --------
-------- ------- ------ --------
<FN>
(1) Reclassifications.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
------------------------------------
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
--------------------------------------------------------------
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1993
---------------------------------------------------
Balance at Additions
------------- Balance
Beginning Charged to Accounts at Close
of Year Profit & Loss Written Off of Year
---------- ------------- ----------- --------
<S> <C> <C> <C> <C>
Reserves for doubtful
accounts and allowances $7,352 $3,750 $1,874 (1) $9,228
------ ------ ------ ------
------ ------ ------ ------
<CAPTION>
YEAR ENDED DECEMBER 31, 1992
---------------------------------------------------
Balance at Additions
------------- Balance
Beginning Charged to Accounts at Close
of Year Profit & Loss Written Off of Year
---------- ------------- ----------- ---------
Reserves for doubtful
accounts and allowances $8,281 $ 810 $1,739 (2) $7,352
------ ------ ------ ------
------ ------ ------ ------
<CAPTION>
YEAR ENDED DECEMBER 31, 1991
---------------------------------------------------
Balance at Additions
------------- Balance
Beginning Charged to Accounts at Close
of Year Profit & Loss Written Off of Year
---------- ------------- ----------- --------
Reserves for doubtful
accounts and allowances $8,794 $1,428 $1,941 (3) $8,281
------ ------ ------ ------
------ ------ ------ ------
<FN>
(1) Net of $ 55 collections on accounts previously written off.
(2) Net of $141 collections on accounts previously written off.
(3) Net of $ 97 collections on accounts previously written off.
</TABLE>
- 18 -
<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
------------------------------------
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
-------------------------------------------------------
(in thousands of dollars)
1993 1992 1991
------- -------- -------
<S> <C> <C> <C>
Maintenance and repairs $37,565 $36,864 $36,397
------- ------- -------
------- ------- -------
</TABLE>
- 19 -
<PAGE>
APPENDIX TO THE ELECTRONIC FILING - 1993 FORM 10-K
Data appearing on bar charts on indicated pages of the 1993 Annual Report.
<TABLE>
<CAPTION>
Page 1989 1990 1991 1992 1993
- ---- ------- ------- ------- ------- -------
<C> <S> <C> <C> <C> <C> <C>
19 Earnings Per Share $.90 $.99 $1.03 $1.10 $.86
20 Net Sales ($ Millions) $1,077 $1,128 $1,142 $1,181 $1,203
20 Return on Average Common
Stockholders Equity 18.7% 18.1% 17.0% 16.5% 12.1%
20 Return on Average Total Capital 13.1% 12.3% 11.8% 11.8% 9.2%
21 Total Debt (including capital
leases) as a Percent of Equity 44% 61% 42% 38% 34%
21 Total Stockholders' Equity
($ Millions) $266 $296 $329 $361 $371
21 Total Debt ($ Millions) $118 $179 $137 $139 $127
21 Capital Expenditures ($ Millions) $76 $73 $57 $71 $61
22 Dividends paid Per Common Share $.30 $.36 $.42 $.46 $.50
</TABLE>
<PAGE>
BEMIS COMPANY, INC.
AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(in thousands, except percents, ratios, per
share amounts, stockholders and employees)
<TABLE>
<CAPTION>
%
1993 1992 Change
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,203,494 $1,181,336 2%
Income before taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,377 90,286 (18)
Taxes based on income. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,300 33,000 (14)
Cumulative effect on prior years of adoption of FAS 112
in 1993 and FAS 106 and FAS 109 in 1992. . . . . . . . . . . . . . . . . . (1,746) (274)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,331 57,012 (22)
Return on average common
stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1% 16.5% (27)
Cash dividends paid on
common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,586 23,530 9
Expenditures for property
and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,729 70,688 (14)
Working capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152,820 154,030 (1)
Current ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 2.0 (10)
Per share of common stock:
Income before effect of changes
in accounting principles . . . . . . . . . . . . . . . . . . . . . . . . .89 1.11 (20)
Cumulative effect of adoption of FAS 112 in 1993
and FAS 106 and FAS 109 in 1992. . . . . . . . . . . . . . . . . . . . . . (.03) (.01)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86 1.10 (22)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 .46 9
Book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.24 7.06 3
Stock PE ratio range . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24-31 18-27
Average common shares and common share
equivalents outstanding during the year for
computation of earnings per share. . . . . . . . . . . . . . . . . . . . . 51,767 51,840
Common shares outstanding at year-end. . . . . . . . . . . . . . . . . . . . 51,201 51,152
Number of common stockholders. . . . . . . . . . . . . . . . . . . . . . . . 5,649 5,020 13
Number of employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,565 7,733 (2)
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
SUMMARY
Several significant strategic actions were taken during 1993 as the Company
continued to focus on its core businesses. In the first quarter, the bakery
packaging business of Princeton Packaging, Inc. was acquired and merged into our
polyethylene packaging operations, and two non-core rigid container businesses
were sold, Louisiana Plastics, Inc. (injection molded containers) and the Nashua
plant (blow molded containers). In the third quarter, a pretax restructuring
charge of $21 million ($13.1 million after-tax or 25 cents per share) was
announced, primarily related to the closedown of the Custom Resins' (nylon resin
manufacturing) plant, the realignment of assets in the packaging machinery
business and the consolidation of two paper packaging plants into larger
facilities.
In addition, the Company made a fourth quarter election to absorb a $1.7
million charge against Net Income (3 cents per share) covering the cumulative
effect of the accounting principles change for postemployment benefits (FAS
112).
Results for 1993 are highlighted by the eleventh consecutive year of
increased sales ($1.20 billion) despite difficult market conditions in Europe.
Net Income of $46.1 million, before the effect of FAS 112 adoption, declined
compared to the prior year. This was due entirely to the $13.1 million
restructuring charge previously explained. Exclusive of these unusual expenses,
Net Income also increased for the eleventh consecutive year. These 1993
increases in both sales and income were generated entirely by the Flexible
Packaging segment. The Specialty Coated and Graphics Products segment was down
in both sales and earnings in 1993 due to the currency dislocations and the weak
economy in Europe.
Net Income for 1992 totaled $57 million versus $53 million for 1991, while
Net Sales were $1.18 billion and $1.14 billion respectively. For the
comparative years, sales and operating income were up in both business segments.
Lower debt and reduced interest rates in 1992 resulted in a $4.6 million drop in
interest expense for 1992 versus 1991 which also contributed to the higher 1992
Net Income.
COSTS AND EXPENSES
Cost of Goods Sold as a percentage of Net Sales remained relatively flat for the
three year period. The slight decrease in gross margins in 1993 relates
primarily to higher overhead rates in our Flexible Packaging area due to
substan-
<TABLE>
<CAPTION>
Percent
THREE-YEAR REVIEW OF RESULTS
1993 1992 1991
------ ----- -----
<S> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0%
Cost of products sold 77.0 76.9 76.9
------ ------ ------
Gross margin 23.0 23.1 23.1
Selling, general and administrative expenses 13.4 13.4 13.6
All other expenses 3.4 2.1 2.1
------ ------ ------
Income before income taxes 6.2 7.6 7.4
Taxes based on income 2.4 2.8 2.8
----- ------ -----
Income before effect of changes in
accounting principles 3.8 4.8 4.6
Cumulative effect on prior years of adoption
of FAS 112 in 1993 and FAS 106 and
FAS 109 in 1992 (0.1)
----- ----- -----
Net income 3.7% 4.8% 4.6%
Effective tax rate 38.0% 36.6% 37.6%
</TABLE>
<PAGE>
tial capital additions not yet fully utilized. In addition, the sharp drop in
European sales in 1993 due to the weak European economy contributed to under
utilization of our manufacturing facilities there.
Selling, General and Administrative Expense increased in absolute dollars in
1993 to $161.6 million from $157.4 million in 1992 and $155.0 million in 1991,
but remained relatively flat as a percent of sales. The somewhat higher
expenditures in 1993 versus 1992 relate primarily to increased costs associated
with the acquisition and integration of the new bakery packaging business,
additional expenditures associated with the implementation of new management
information systems, and added 1993 costs for postretirement benefits associated
with FAS 106 adopted in 1992.
Research and Development Expense was $14.1 million in 1993, $15.9 million in
1992 and $13.2 million in 1991. The 1993 decline was due to reduced expenditures
in both business segments. In 1992 our expenses were up over 1991 due to
increased product development expense in our packaging machinery business.
Interest Expense was $7.2 million for 1993, compared to $7.5 million in 1992
and $12.1 million in 1991. The modest decrease between 1993 and 1992 is due
entirely to lower average interest rates during the year. The combination of
lower average debt and declining interest rates accounted for the sharp drop in
interest expense between 1992 and 1991.
Other Costs (Income) reflects a $17.7 million cost for 1993 versus income of
$1.7 million in 1992 and $4.2 million in 1991. The sharp expense increase in
1993 is due principally to a third quarter restructuring charge of $21 million.
The decline of $2.5 million in Other Income for 1992 versus 1991 relates
primarily to the 1991 gain from the sale of Sackner Products, Inc.
INCOME TAXES
Our effective tax rates were 38 percent in 1993 versus 37 percent in 1992 and
38 percent in 1991. The increase in 1993 is due primarily to the 1 percent
increase in the U.S. Federal statutory tax rate during the year. The reduced
rate in 1992 versus 1991 is due to changes in the overall effective foreign tax
rate for 1992. The primary difference between our overall tax rate and the U.S.
statutory tax rate of 35 percent in 1993 and 34 percent in 1992 and 1991 relates
to state and local income taxes net of the federal income tax benefit.
ACCOUNTING CHANGES
In 1993, the Company elected early adoption of FAS 112, Employers' Accounting
for Postemployment Benefits, which resulted in a $1.7 million charge against Net
Income (3 cents per share). In 1992, the Company elected early adoption of FAS
106, Employers' Accounting for Postretirement Benefits Other Than Pensions, and
also adopted FAS 109, Accounting for Income Taxes. These two accounting changes
combined resulted in a charge against Net Income for 1992 of $.3 million (1 cent
per share).
OTHER
In January of 1994, the Company completed two new acquisitions:
<PAGE>
Fitchburg Coated Products, a Scranton, Pennsylvania, pressure-sensitive
materials manufacturer with annual sales of approximately $80 million; and
Hargro Health Care Packaging, a Chicago flexible packaging manufacturer with
annual sales of $17 million.
Looking forward, 1993 closed on a positive note with a strong fourth quarter
performance, particularly in the Flexible Packaging Products segment. While
European business conditions are projected to remain somewhat depressed in 1994,
we expect that our downturn there has bottomed out. These factors coupled with
recent acquisitions, better utilization of our expanded facilities, and
completion of the restructuring program started in 1993 position the Company for
improved long-term growth and profitability.
RETURN ON INVESTMENT
Return on average common stockholders' equity in 1993 was 12.1 percent
compared to 16.5 percent in 1992 and 17 percent in 1991. The sharp decline for
1993 versus 1992 is due primarily to the $21 million restructuring charge in
1993, previously explained.
Operating profit as a percent of average investment, which appears in the
Five Year Summary on page five of this report, was 16.9 percent in 1993,
compared to 20.9 percent in 1992 and 21.3 percent in 1991.
The return in Flexible Packaging was 16.2 percent in 1993 compared to 19.3
percent in 1992 and 20 percent in 1991. The return in Specialty Coated and
Graphics Products was 18.9 percent in 1993 compared to 25.2 percent in 1992 and
24.4 percent in 1991.
Return on average total capital was 9.2 percent in 1993 and 11.8 percent in
both 1992 and 1991. Total capital is defined as the sum of all short-term and
long-term debt, including obligations under capital leases, stockholders' equity
and deferred taxes. Return on capital is based on net income adjusted for
interest expense on an after-tax basis.
CAPITAL EXPENDITURES
Capital expenditures in 1993 were $60.7 million compared to $70.7 million in
1992 and $56.9 million in 1991. In 1994 management anticipates expenditures in
the $75 to $80 million range. The bulk of these expenditures will be for
continued expansion of the Company's major growth businesses, with major
equipment planned for both the coated and laminated film and polyethylene
packaging businesses. These expenditures will be made primarily from internally
generated funds.
CAPITAL STRUCTURE, LIQUIDITY AND CASH FLOW
Stockholders' equity increased in 1993 to $370.5 million, up from $361.0
million in 1992 and $329.2 million in 1991, due primarily to earnings net of
dividend payments. In 1993 there were $1.3 million in common stock purchases
compared to no purchases in 1992 and 1991.
Total debt decreased $11.3 million in 1993 to $127.3 million, making debt as
a percent of stockholders' equity 34 percent compared to 38 percent in 1992 and
42 percent in 1991. In 1994 total debt is expected to increase $30 - $40 million
due to acquisitions and increases in capital expenditures and working capital.
Working capital (excluding short-term debt) decreased by $4.6 million to
$156.9 million in 1993 following an increase of $13 million to $161.5 million in
1992, and a decrease of $9.8 million in 1991.
<PAGE>
The current ratio in 1993 was 1.8:1 compared to 2.0:1 in 1992 and 1.8:1 in 1991.
The Company's cash flow remained strong in 1993 as cash provided by
operations was $97.5 million compared to $93.8 million in 1992 and $102.8
million in 1991. Cash provided by operations was reduced in 1993 by charges
against income of $15.9 million for restructuring and FAS 112, and in 1992 by
$13.3 million relating to FAS 106. The following schedule presents the major
sources and uses of cash for the Company in 1993.
<TABLE>
<CAPTION>
SOURCES AND USES OF CASH
(in millions of dollars)
SOURCES
<S> <C>
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44.3
Depreciation and
amortization . . . . . . . . . . . . . . . . . . . . . . . . . . 47.0
Decrease in working capital* . . . . . . . . . . . . . . . . . . . 4.6
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4
------
Total Sources. . . . . . . . . . . . . . . . . . . . . . . . . . $105.3
======
USES
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . $ 60.7
Business acquisition,
net of dispositions. . . . . . . . . . . . . . . . . . . . . . . 7.7
Decrease in total debt . . . . . . . . . . . . . . . . . . . . . . 11.3
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6
-----
Total Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . $105.3
======
<FN>
*Excluding short-term debt
</TABLE>
The Company's pretax interest coverage was 11 times in 1993 compared to 13
times in 1992 and 8 times in 1991. Pretax income decreased to $74.4 million in
1993 from $90.3 million in 1992 and $84.9 million in 1991. Interest expense was
$7.2 million in 1993, $7.5 million in 1992 and $12.1 million in 1991.
Following are pretax interest coverage ratios for the last five years:
PRETAX INTEREST COVERAGE
COVERAGE OF INTEREST BY
PRETAX INCOME AND INTEREST
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993
- -----------------------------------------------
<S> <C> <C> <C> <C>
7.1 8.0 8.0 13.0 11.3
- -----------------------------------------------
</TABLE>
Substantial credit is available to the Company for future use, including a
revolving credit agreement with five banks which was increased from $100 million
to $140 million early in 1993. Bemis is also an issuer of commercial paper which
carries an A1/P1 rating.
MARKET PRICES* AND DIVIDENDS PER COMMON SHARE OF STOCK
The Bemis quarterly dividend was increased by 9 percent in the first quarter
of 1993 to 12.5 cents per share from 11.5 cents. This followed first quarter
increases of 10 percent in 1992 to 11.5 cents per share from 10.5 cents, and 17
percent in 1991 to 10.5 cents per share from 9 cents.
Common dividends for the year were 50 cents per share, up from 46 cents in
1992 and 42 cents in 1991. The 1993 payout ratio was 58 percent compared to 42
percent in 1992 and 41 percent in 1991. Based on the market price of $25 per
share at the beginning of 1993, the dividend yield was 2.0 percent.
Stockholders' equity per common share (book value per share) increased to
$7.24 per share in 1993, up from $7.06 per share in 1992 and $6.46 per share in
1991.
Trading volume in Bemis common stock was 14,298,000 shares in 1993. During
the year the Company purchased 56,112 shares of its common stock.
In February 1994 the Board of Directors increased the quarterly cash dividend
on common stock to 13.5 cents per share from 12.5 cents, an 8 percent increase.
The accompanying schedule shows quarterly closing market prices and dividend
information.
<TABLE>
<CAPTION>
BEMIS COMMON STOCK 1993 1992 1991
---------------------------------------------------------------------------------------------
PERFORMANCE Dividend Dividend Dividend
High Low Paid High Low Paid High Low Paid
------------------------------ ---------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter. . . . . . . . . 26 3/4 24 $.125 24 1/8 20 1/8 $.115 19 7/8 13 7/16 $.105
Second Quarter . . . . . . . . 24 7/8 21 1/4 .125 26 1/8 21 3/4 .115 19 3/8 16 5/8 .105
Third Quarter. . . . . . . . . 23 1/8 20 1/4 .125 29 1/4 24 3/8 .115 18 1/16 16 3/16 .105
Fourth Quarter . . . . . . . . 23 5/8 20 1/4 .125 27 21 3/8 .115 20 1/2 17 7/8 .105
<FN>
*New York Stock Exchange: BMS
</TABLE>
<PAGE>
BEMIS COMPANY, INC.
AND SUBSIDIARIES
FIVE-YEAR CONSOLIDATED REVIEW
(in millions, except percents, shares, ratios, per
share amounts, stockholders and employees)
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
- --------------------------------------------------------------------------------------------------------------
OPERATING DATA
<S> <C> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . . . $1,203.5 $1,181.3 $1,141.6 $1,128.2 $1,076.7
Cost of products sold and other expenses . . . . . 1,121.9 1,083.5 1,044.6 1,034.8 988.4
Interest expense . . . . . . . . . . . . . . . . . 7.2 7.5 12.1 11.7 12.4
Income before income taxes . . . . . . . . . . . . 74.4 90.3 84.9 81.7 75.9
Income taxes . . . . . . . . . . . . . . . . . . . 28.3 33.0 31.9 30.8 28.9
Income before effect of changes in
accounting principles. . . . . . . . . . . . . . 46.1 57.3 53.0 50.9 47.0
Cumulative effect on prior years of adoption
of FAS 112 in 1993 and FAS 106 and
FAS 109 in 1992. . . . . . . . . . . . . . . . . (1.8) (.3)
Net income . . . . . . . . . . . . . . . . . . . . 44.3 57.0 53.0 50.9 47.0
Net income as a percentage of net sales. . . . . . 3.7% 4.8% 4.6% 4.5% 4.4%
COMMON SHARE DATA
Income before effect of changes in
accounting principles. . . . . . . . . . . . . . .89 1.11 1.03 .99 .90
Cumulative effect of adoption of FAS 112 in
1993 and FAS 106 and FAS 109 in 1992 . . . . . . (.03) (.01)
Net income . . . . . . . . . . . . . . . . . . . . .86 1.10 1.03 .99 .90
Dividends per common share . . . . . . . . . . . . .50 .46 .42 .36 .30
Book value per common share. . . . . . . . . . . . 7.24 7.06 6.46 5.81 5.23
Stock PE ratio range . . . . . . . . . . . . . . . 24-31 18-27 13-20 13-19 13-20
Average common shares and common share
equivalents outstanding during the year for
computation of earnings per share. . . . . . . .51,767,064 51,839,696 51,529,806 51,402,988 52,146,346
Common shares outstanding at year-end. . . . . . .51,201,326 51,151,770 50,986,128 50,918,932 50,889,756
CAPITAL STRUCTURE AND OTHER DATA
Current ratio. . . . . . . . . . . . . . . . . . . 1.8 2.0 1.8 1.8 1.7
Working capital. . . . . . . . . . . . . . . . . . 152.8 154.0 140.6 150.2 115.1
Total assets . . . . . . . . . . . . . . . . . . . 789.8 742.7 714.9 756.5 631.6
Long-term debt . . . . . . . . . . . . . . . . . . 120.5 127.8 125.2 166.9 106.4
Long-term obligations under capital leases . . . . 2.7 3.2 3.6 4.2 3.2
Stockholders' equity . . . . . . . . . . . . . . . 370.5 361.0 329.2 295.6 266.0
Return on average common equity. . . . . . . . . . 12.1% 16.5% 17.0% 18.1% 18.7%
Return on average total capital. . . . . . . . . . 9.2% 11.8% 11.8% 12.3% 13.1%
Depreciation and amortization. . . . . . . . . . . 47.0 48.3 47.1 42.3 36.8
Capital expenditures . . . . . . . . . . . . . . . 60.7 70.7 56.9 73.1 76.3
Number of common stockholders. . . . . . . . . . . 5,649 5,020 4,411 4,479 3,891
Number of employees. . . . . . . . . . . . . . . . 7,565 7,733 7,796 7,950 7,524
Wages and salaries . . . . . . . . . . . . . . . . 251.6 246.3 234.5 225.9 214.1
Research and development expense . . . . . . . . . 14.1 15.9 13.2 15.4 12.3
</TABLE>
<PAGE>
MANAGEMENT'S RESPONSIBILITY STATEMENT
The management of Bemis Company, Inc., is responsible for the integrity,
objectivity and accuracy of the financial statements of the Company. The
financial statements are prepared by the Company in accordance with generally
accepted accounting principles using management's best estimates and judgments,
where appropriate. The financial information presented throughout the Annual
Report is consistent with that in the financial statements.
Management is also responsible for maintaining a system of internal
accounting controls and procedures designed to provide reasonable assurance that
the books and records reflect the transactions of the Company, and that assets
are protected against loss from unauthorized use or disposition. Such a system
is maintained through written accounting policies and procedures, administered
by trained Company personnel and updated on a continuing basis to ensure their
adequacy to meet the changing requirements of our business. The Company also
maintains an internal audit department which evaluates the adequacy of and
investigates adherence to these controls and procedures. In addition, the
Company's General Orders require that all of its affairs, as reflected by the
actions of its employees, will be conducted on a high ethical plane.
Price Waterhouse, independent accountants, are retained to audit the
financial statements. Their audit is conducted in accordance with generally
accepted auditing standards and includes selective reviews of internal
accounting controls.
The Audit Committee of the Board of Directors, which is composed solely of
outside directors, meets periodically with management, internal auditors and
independent accountants to review the work of each and to satisfy itself that
the respective parties are properly discharging their responsibilities. Both the
independent accountants, Price Waterhouse, and the internal auditors have had
unrestricted access to the Audit Committee without the presence of Company
management for the purpose of discussing the results of their examination and
their opinions on the adequacy of internal accounting controls and the quality
of financial reporting.
/s/ John H. Roe
John H. Roe
President and Chief Executive Officer
/s/ Benjamin R. Field, III
Benjamin R. Field, III
Senior Vice President,
Chief Financial Officer and Treasurer
/s/ LeRoy F. Bazany
LeRoy F. Bazany
Vice President and Controller
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and the Board of Directors of Bemis Company, Inc.:
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Bemis
Company, Inc., and its subsidiaries at December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1993, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse
Price Waterhouse
Minneapolis, Minnesota, January 24, 1994
<PAGE>
BEMIS COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Years ended December 31
(in thousands of dollars except per share amounts)
<TABLE>
<CAPTION>
1993 1992 1991
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . . . . . . $1,203,494 $1,181,336 $1,141,638
Costs and expenses:
Cost of products sold. . . . . . . . . . . . . . . . . 926,135 908,394 877,789
Selling, general and administrative expenses . . . . . 161,598 157,383 155,045
Research and development . . . . . . . . . . . . . . . 14,084 15,939 13,223
Interest . . . . . . . . . . . . . . . . . . . . . . . 7,201 7,546 12,101
Other costs (income), net. . . . . . . . . . . . . . . 17,739 (1,661) (4,178)
Minority interest in net income. . . . . . . . . . . . 2,360 3,449 2,740
---------- ---------- ----------
Income before income taxes . . . . . . . . . . . . . . . 74,377 90,286 84,918
Provision for income taxes . . . . . . . . . . . . . . . 28,300 33,000 31,900
----------- ----------- ----------
Income before effect of changes in accounting principles 46,077 57,286 53,018
Cumulative effect on prior years of adoption of FAS 112
in 1993 and FAS 106 and FAS 109 in 1992. . . . . . . . (1,746) (274)
---------- ---------- ----------
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 44,331 $ 57,012 $ 53,018
========== ========== ==========
Earnings per share of common stock before effect
of changes in accounting principles. . . . . . . . . . $ .89 $1.11 $1.03
Cumulative effect of adoption of FAS 112 in 1993
and FAS 106 and FAS 109 in 1992. . . . . . . . . . . . (.03) (.01)
---------- ---------- ----------
Earnings per share of common stock . . . . . . . . . . . $ .86 $1.10 $1.03
========== ========== ==========
</TABLE>
(See accompanying notes to consolidated financial statements.)
<PAGE>
CONSOLIDATED BALANCE SHEET
December 31
(in thousands of dollars)
<TABLE>
<CAPTION>
ASSETS 1993 1992
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,911 $ 101
Accounts receivable, less $9,228 and $7,352
for doubtful accounts and allowances . . . . . . . . . 161,695 166,081
Inventories. . . . . . . . . . . . . . . . . . . . . . . 127,123 128,854
Prepaid expenses and deferred charges. . . . . . . . . . 39,280 19,563
-------- --------
Total current assets . . . . . . . . . . . . . . . . . 337,009 314,599
-------- --------
Property and equipment:
Land and land improvements . . . . . . . . . . . . . . . 11,900 11,815
Buildings and leasehold improvements . . . . . . . . . . 148,814 147,670
Machinery and equipment. . . . . . . . . . . . . . . . . 515,917 506,430
-------- --------
. . . . . . . . . . . . . . . . . . . . . . . . . . . 676,631 665,915
Less - accumulated depreciation. . . . . . . . . . . . . 261,743 275,185
-------- --------
. . . . . . . . . . . . . . . . . . . . . . . . . . . 414,888 390,730
-------- --------
Excess of cost of investments in subsidiaries over
net assets acquired. . . . . . . . . . . . . . . . . . . 24,814 25,759
Other assets . . . . . . . . . . . . . . . . . . . . . . . 13,056 11,582
-------- --------
. . . . . . . . . . . . . . . . . . . . . . . . . . . 37,870 37,341
-------- --------
Total assets . . . . . . . . . . . . . . . . . . . . . . . $789,767 $742,670
======== ========
</TABLE>
continued
See accompanying notes to consolidated financial statements.)
<PAGE>
BEMIS COMPANY, INC.
AND SUBSIDIARIES
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1993 1992
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Bank borrowings. . . . . . . . . . . . . . . . . . . . . $ $ 1,299
Current portion of long-term debt. . . . . . . . . . . . 4,035 6,159
Accounts payable . . . . . . . . . . . . . . . . . . . . 138,243 113,880
Accrued liabilities:
Salaries and wages . . . . . . . . . . . . . . . . . . 22,015 24,339
Income taxes . . . . . . . . . . . . . . . . . . . . . 9,875 8,268
Other taxes. . . . . . . . . . . . . . . . . . . . . . 10,021 6,624
-------- --------
Total current liabilities. . . . . . . . . . . . . . 184,189 160,569
Long-term debt, less current portion . . . . . . . . . . . 123,215 131,077
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . 35,813 33,341
Other liabilities and deferred credits . . . . . . . . . . 54,602 33,439
-------- --------
Total liabilities. . . . . . . . . . . . . . . . . . . 397,819 358,426
-------- --------
Minority interest. . . . . . . . . . . . . . . . . . . . . 21,409 23,294
Stockholders' equity:
Common stock, $.10 par value:
Authorized - 123,800,000 shares
Issued - 55,713,731 and 55,608,063 shares. . . . . . . 5,571 5,561
Capital in excess of par value . . . . . . . . . . . . . 101,153 99,521
Retained income. . . . . . . . . . . . . . . . . . . . . 397,922 382,056
Cumulative translation adjustment. . . . . . . . . . . . (614) 6,043
Common stock held in treasury,
4,512,405 and 4,456,293 shares, at cost. . . . . . . . (133,493) (132,231)
-------- --------
Total stockholders' equity . . . . . . . . . . . . . . 370,539 360,950
-------- --------
Total liabilities and stockholders' equity . . . . . . . . $789,767 $742,670
======== ========
</TABLE>
<PAGE>
CONSOLIDATED STATEMENT
OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31
(in thousands of dollars)
1993 1992 1991
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 44,331 $57,012 $ 53,018
Non-cash items:
Depreciation and amortization. . . . . . . . . . . . . 46,982 48,304 47,086
Minority interest in net income. . . . . . . . . . . . 2,360 3,449 2,740
Deferred income taxes, non-current portion . . . . . . 2,582 (13,144) (538)
Loss (gain) on sale of property and equipment. . . . . 1,231 (1,850) 540
-------- ------- --------
Cash provided by operations. . . . . . . . . . . . . . . 97,486 93,771 102,846
Changes in working capital, net of
affect of acquisitions and dispositions:
Accounts receivable. . . . . . . . . . . . . . . . . . (3,188) (12,982) 9,103
Inventories. . . . . . . . . . . . . . . . . . . . . . (654) 61 11,472
Prepaid expenses and deferred charges. . . . . . . . . (19,589) (1,524) 3,080
Accounts payable . . . . . . . . . . . . . . . . . . . 19,038 2,505 (28,708)
Accrued salaries and wages . . . . . . . . . . . . . . (1,110) (1,079) 2,157
Accrued income taxes . . . . . . . . . . . . . . . . . 1,586 (3,247) 1,470
Accrued other taxes. . . . . . . . . . . . . . . . . . 3,798 (2,439) 1,477
Changes in other liabilities and deferred credits. . . . 18,284 12,780 (2,393)
Changes in deferred charges and other investments. . . . (742) (1,041) 1,783
Other. . . . . . . . . . . . . . . . . . . . . . . . . . (1,005) (479) (476)
-------- ------- --------
Net cash provided by operating activities. . . . . . . . . $113,904 $86,326 $101,811
======== ======= ========
</TABLE>
continued
<PAGE>
BEMIS COMPANY, INC.
AND SUBSIDIARIES
<TABLE>
<CAPTION>
continued 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from investing activities:
Additions to property, plant and equipment . . . . . . . $(60,729) $(70,688) $(56,947)
Business acquisition, net of divestitures. . . . . . . . (7,684)
Proceeds from sale of property and equipment . . . . . . 2,491 3,577 6,888
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 111 433 1,026
-------- -------- --------
Net cash used by investing activities. . . . . . . . . . . (65,811) (66,678) (49,033)
-------- -------- --------
Cash flows from financing activities:
Increase in long-term debt . . . . . . . . . . . . . . . 4,791 8,101
Repayment of long-term debt. . . . . . . . . . . . . . . (11,426) (6,355) (40,829)
Change in bank borrowings. . . . . . . . . . . . . . . . (1,131) (107) 825
Change in current portion of long-term debt. . . . . . . (1,701) (48) (203)
Cash dividends paid. . . . . . . . . . . . . . . . . . . (25,586) (23,530) (21,414)
Subsidiary dividends to minority stockholders. . . . . . (3,406) (1,611)
Purchase of common stock for the treasury . . . . . . . (1,262) (1)
Stock incentive programs and related tax effects . . . . 1,642 1,374 311
-------- -------- --------
Net cash used by financing activities . . . . . . . . . . (38,079) (22,177) (61,310)
-------- -------- --------
Effect of exchange rates . . . . . . . . . . . . . . . . . (1,204) 1,238 752
-------- -------- --------
Net increase (decrease) in cash. . . . . . . . . . . . . . $ 8,810 $ (1,291) $ (7,780)
======== ======== ========
<FN>
(See accompanying notes to consolidated financial statements.)
During the three years ended December 31, 1993, 1992 and
1991, the Company paid interest of $7,633,000, $9,573,000 and
$13,162,000, and income taxes of $34,872,000, $36,127,000
and $30,516,000, respectively.
</TABLE>
<PAGE>
BEMIS COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT
OF STOCKHOLDERS' EQUITY
(in thousands of dollars)
<TABLE>
<CAPTION>
Capital in Cumulative Common
Common Excess of Retained Translation Stock Held
Stock Par Value Income Adjustment in Treasury
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1990 . . . . . . . . $2,992 $100,405 $313,167 $11,308 $(132,230)
Net income for 1991. . . . . . . . . . . . . 53,018
Translation adjustment for 1991. . . . . . . (1,727)
Pension liability adjustment . . . . . . . . 3,396
Cash dividends paid on common stock,
$.42 per share . . . . . . . . . . . . . . (21,414)
Stock incentive programs and
related tax effects. . . . . . . . . . . . 3 308
25,493,064 shares issued for
two-for-one stock split. . . . . . . . . . 2,549 (2,549)
------ ------- -------- ------- ----------
Balance at December 31, 1991 . . . . . . . . 5,544 98,164 348,167 9,581 (132,230)
Net income for 1992. . . . . . . . . . . . . 57,012
Translation adjustment for 1992. . . . . . . (3,538)
Pension liability adjustment . . . . . . . . 407
Cash dividends paid on common stock,
$.46 per share . . . . . . . . . . . . . . (23,530)
Stock incentive programs and
related tax effects. . . . . . . . . . . . 17 1,357
Purchase of 4 shares of
common stock . . . . . . . . . . . . . . . (1)
------ ------- -------- ------- ----------
Balance at December 31, 1992 . . . . . . . . 5,561 99,521 382,056 6,043 (132,231)
Net income for 1993. . . . . . . . . . . . . 44,331
Translation adjustment for 1993. . . . . . . (6,657)
Pension liability adjustment . . . . . . . . (2,879)
Cash dividends paid on common stock,
$.50 per share . . . . . . . . . . . . . . (25,586)
Stock incentive programs and
related tax effects. . . . . . . . . . . . 10 1,632
Purchase of 56,112 shares of
common stock . . . . . . . . . . . . . . . (1,262)
----- ------ ------- ------- ----------
Balance at December 31, 1993 . . . . . . . . $5,571 $101,153 $397,922 $ (614) $(133,493)
===== ======= ======= ======= ==========
</TABLE>
(See accompanying notes to consolidated financial statements.)
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of the Company and
its majority owned subsidiaries. All significant intercompany transactions
and accounts have been eliminated in consolidation.
REVENUE RECOGNITION:
Sales and related cost of sales are recognized primarily upon shipment of
products.
RESEARCH AND DEVELOPMENT:
Research and development expenditures are charged against income as incurred.
EARNINGS PER SHARE:
Earnings per common share are computed by dividing net income by the
weighted-average number of common shares outstanding during the year including
common stock equivalents, if dilutive.
INVENTORIES ARE VALUED AT THE LOWER OF COST OR MARKET:
Cost is determined by the last-in, first-out (LIFO) method for essentially all
domestic inventories. Cost for all other inventories is determined using the
first-in, first-out (FIFO) method.
PROPERTY AND EQUIPMENT:
Property and equipment are stated at cost. Plant and equipment are depreciated
for financial reporting purposes principally using the straight line method
over the estimated useful lives of assets. For tax purposes the Company
generally uses accelerated methods of depreciation. The tax effect of the
difference between book and tax depreciation has been provided as deferred
income taxes. On sale or retirement, the asset cost and related accumulated
depreciation are removed from the accounts and any related gain or loss is
reflected in income. Maintenance and repairs which do not improve efficiency
or extend economic life are expensed currently. Interest costs are capitalized
for major capital expenditures during construction.
EXCESS OF COST OF INVESTMENTS IN SUBSIDIARIES
OVER NET ASSETS ACQUIRED:
The excess relating to companies acquired prior to 1971 is not amortized
against income unless a loss of value becomes evident. The excess resulting
from investments made subsequent to 1970 is being amortized against income
over 40 years.
TAXES ON UNDISTRIBUTED EARNINGS:
No provision is made for U.S. income taxes on earnings of subsidiary companies
which the Company controls but does not include in the consolidated federal
income tax return since it is management's practice and intent to permanently
reinvest the earnings.
TRANSLATION OF FOREIGN CURRENCIES:
Assets and liabilities are translated at the exchange rate as of the balance
sheet date. All revenue and expense accounts are translated at a
weighted-average of exchange rates in effect during the year. Translation
adjustments are recorded as a separate component of equity.
STATEMENT OF CASH FLOWS:
For purposes of reporting cash flows, cash includes cash on hand and demand
deposit accounts.
PREFERRED STOCK PURCHASE RIGHTS:
On August 3, 1989, the Company's Board of Directors adopted a Shareholder
Rights Plan by declaring a dividend of one preferred share purchase right for
each outstanding share of common stock. Under certain circumstances, a right
may be exercised to purchase one one-hundredth of a share of Series A Junior
Preferred Stock for $120.00. The rights become exercisable if and when a
person acquires 20 percent or more of the Company's outstanding common stock,
subject to certain exceptions, or announces an offer which would result in
such person acquiring 20 percent or more of the Company's common stock. Upon
the rights becoming exercisable, each right will entitle its holder to buy
common stock of the Company having a market value of twice the exercise price
of the right. The rights expire August 22, 1999, and may be redeemed by the
Company for 1 cent per right at any time before the 30th day following the
announcement that a person has acquired 20 percent or more of the Company's
common stock. In connection with the Shareholder Rights Plan, the Company's
Board of Directors authorized 600,000 shares of Series A Junior Preferred
Stock with a par value of $1 per share. At December 31, 1993, none of these
shares were issued or outstanding.
<PAGE>
NOTE 2 - CHANGES IN ACCOUNTING PRINCIPLES
The Company adopted Financial Accounting Standards related to postemployment
benefits (Statement 112), income taxes (Statement 109) and postretirement
benefits other than pensions (Statement 106) during 1993 and 1992.
Accordingly, the cumulative effect of these changes in accounting have been
reported in the Consolidated Statement of Income as follows:
<TABLE>
<CAPTION>
(in thousands of dollars, except EPS) 1993 1992
- ----------------------------------------------------------------------------
<S> <C> <C>
Statement 112, Postemployment Benefits:
Cumulative effect on prior years . . . . . . . $(2,798)
Income tax benefit upon
adoption of FAS 112. . . . . . . . . . . . . 1,052
Statement 106, Postretirement Benefits
Other Than Pensions:
Cumulative effect on prior years . . . . . . . $(13,345)
Income tax benefit upon
adoption of FAS 106. . . . . . . . . . . . . 4,978
Statement 109, Accounting for Income Taxes:
Cumulative effect on prior years . . . . . . . 8,093
-------- --------
Cumulative net effect on prior years of
adoption of FAS 112 in 1993 and
FAS 106 and FAS 109 in 1992. . . . . . . . . . $(1,746) $ (274)
------- --------
Effect on EPS of common stock
of adoption of FAS 112
($2,798 less $1,052 tax benefit) . . . . . . . $ (.03)
Effect on EPS of common stock
of adoption of FAS 106
($13,345 less $4,978 tax benefit). . . . . . . $ (.161)
Effect on EPS of common stock
of adoption of FAS 109 . . . . . . . . . . . . .156
. . . . . . . . . . . . . . . . . . . . . .
Net effect on EPS. . . . . . . . . . . . . . . . $ (.03) $ (.005)
------- --------
</TABLE>
NOTE 3 - BUSINESS ACQUISITION AND DISPOSITIONS
On February 4, 1993, the Company acquired the Princeton Packaging Bakery
Division for $32.7 million in cash. The acquisition has been accounted for under
the purchase method of accounting. The Bakery Division's results of operations
subsequent to February 4, 1993, are included in these financial statements.
On February 26, 1993, the Company's blow-molding operation located in Nashua,
New Hampshire, was sold. On March 12, 1993, the Company's subsidiary, Louisiana
Plastics, Inc., was sold. Cash received for these two operations totalled $25
million. The nominal gain realized on these transactions is included in other
income.
Supplemental pro forma results of operations giving effect to the acquisition
and dispositions are not presented as they are not material.
NOTE 4 - RESTRUCTURING OF OPERATIONS
During 1993 the Company initiated a restructuring program for the Flexible
Packaging Products line of business primarily related to the closedown of the
Custom Resins' nylon resin manufacturing plant, the realignment of assets in the
packaging machinery business and the consolidation of two paper packaging plants
into larger facilities. As a result, other costs include a provision for
restructuring cost of $21,000,000.
NOTE 5 - INVENTORIES
The Company utilizes the LIFO method of inventory valuation for essentially
all domestic inventories. Approximately 80 percent of the December 31, 1993, and
77 percent of the December 31, 1992, inventories are valued using the last-in,
first-out (LIFO) method. All other inventories are valued using the first-in,
first-out (FIFO) method.
Inventories are summarized at December 31, as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Raw materials and supplies . . . . . . . . . . . $ 53,966 $ 56,791 $ 56,035
Work in process and
finished goods . . . . . . . . . . . . . . . . 119,581 127,762 128,445
-------- -------- --------
173,547 184,553 184,480
Excess of current cost
over LIFO inventory value. . . . . . . . . . . (46,424) (55,699) (53,163)
-------- -------- --------
Total inventories. . . . . . . . . . . . . . . . $127,123 $128,854 $131,317
-------- -------- --------
-------- -------- --------
</TABLE>
<PAGE>
NOTE 6 - FOREIGN OPERATIONS
The foreign countries in which the Company conducts operations generally
impose no significant restrictions on transfers of funds. Amounts attributable
to foreign operations included in the consolidated statements are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales of consolidated
foreign subsidiaries . . . . . . . . . . . . . $188,559 $223,171 $212,641
Net income of
consolidated foreign
subsidiaries . . . . . . . . . . . . . . . . . 3,398 7,547 9,519
Foreign earnings (less than)
or in excess of amounts
received . . . . . . . . . . . . . . . . . . . (272) 5,397 1,982
Equity in net assets . . . . . . . . . . . . . . 70,153 76,561 74,442
Equity in total assets . . . . . . . . . . . . . $127,333 $148,525 $158,484
</TABLE>
NOTE 7 - PENSION PLANS
Total pension expense in 1993, 1992 and 1991 was $7,908,000, $9,483,000 and
$9,747,000, respectively.
Defined contribution plans cover employees at nine different manufacturing or
administrative locations and provide for contributions ranging from 2.5% to 4%
of covered employees' salaries or wages and totaled $1,125,000 in 1993, $321,000
in 1992 and $427,000 in 1991. Multiemployer plans cover employees at three
different manufacturing locations and provide for contributions to a union
administered defined benefit pension plan. Amounts charged to pension cost and
contributed to the plan in 1993, 1992 and 1991 totaled $974,000, $864,000 and
$755,000.
The Company has defined benefit pension plans covering the majority of U.S.
employees. The benefits under the plans are based on years of service and salary
levels. Certain plans covering hourly employees provide benefits of stated
amounts for each year of service. In addition, the Company also sponsors an
unfunded supplemental retirement plan to provide senior management with benefits
in excess of limits under the federal tax law and increased benefits to reflect
a service adjustment factor.
The funded status of the defined benefit plans at December 31, 1993, is as
follows:
<TABLE>
<CAPTION>
PLANS WITH PLANS WITH
ASSETS IN ACCUMULATED
EXCESS OF BENEFITS IN
ACCUMULATED EXCESS OF
(IN THOUSANDS OF DOLLARS) BENEFITS ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value
of benefit obligation:
Vested benefit obligation. . . . . . . . . . . . . $122,748 $ 62,427
Nonvested benefit obligation . . . . . . . . . . . 8,035 2,503
-------- --------
Accumulated benefit obligation . . . . . . . . . . $130,783 $ 64,930
======== ========
Projected benefit obligation . . . . . . . . . . . . $154,529 $ 67,712
Plan assets at fair value. . . . . . . . . . . . . . 144,460 56,801
-------- --------
Projected benefit obligations
(in excess of) less than
plan assets. . . . . . . . . . . . . . . . . . . . (10,069) (10,911)
Unrecognized net obligation. . . . . . . . . . . . . 9,808 2,995
Unrecognized prior service cost. . . . . . . . . . . (1,513) 5,481
Unrecognized net (gain) or loss. . . . . . . . . . . (2,414) 6,391
-------- --------
Prepaid pension cost
(pension liability). . . . . . . . . . . . . . . . $ (4,188) $ 3,956
======== ========
</TABLE>
Pension cost for defined benefit plans included the following components:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned
during the year. . . . . . . . . . . . . . . . $ 5,458 $ 5,962 $ 5,654
Interest cost on projected
benefit obligation . . . . . . . . . . . . . . 14,983 14,992 14,019
Actual return on plan assets . . . . . . . . . . (12,042) (10,268) (37,482)
Net amortization and deferral. . . . . . . . . . (3,387) (3,118) 25,710
------- ------- -------
Net pension expense. . . . . . . . . . . . . . . $ 5,012 $ 7,568 $ 7,901
======= ======= =======
</TABLE>
<PAGE>
NOTE 7 - PENSION PLANS CONTINUED
The Company has recorded the following amounts pursuant to Statement of
Financial Accounting Standards No. 87, Employers' Accounting for Pensions:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) Dec. 31, 1993 Dec. 31, 1992
- -------------------------------------------------------------------------------
<S> <C> <C>
Intangible asset . . . . . . . . . . . . . . . . . . $ 7,164 $ 6,657
Prepaid tax. . . . . . . . . . . . . . . . . . . . . 1,850 99
Pension liability. . . . . . . . . . . . . . . . . . (12,084) (6,948)
-------- -------
Reduction in stockholders' equity. . . . . . . . . . $ (3,070) $ (192)
-------- -------
</TABLE>
The weighted-average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7 percent and 5.5 percent, respectively. The
expected long-term rate of return on assets was 9 percent.
NOTE 8 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company sponsors several defined benefit postretirement plans that cover
more than 50 percent of salaried and nonsalaried employees. These plans provide
health care benefits and in some instances provide life insurance benefits.
Except for one closed-group plan, which is noncontributory, postretirement
health care plans are contributory, with retiree contributions adjusted
annually; life insurance plans are noncontributory. Except for a single
closed-group plan, the accounting for the health care plans anticipates future
cost-sharing changes to the written plan that are consistent with the Company's
expressed intent to increase retiree contributions to either match the full
premium cost of an active full-time employee or to cover the actual claims cost
of retirees as a group.
The adoption of FAS 106, effective January 1, 1992, places the accounting for
postretirement benefits other than pensions on an actuarially determined accrual
basis rather than an actual net cash cost basis. The actuarially determined cost
for postretirement benefits in 1993 was $1,458,000 and $1,406,000 in 1992,
compared to a net cash cost of $733,000 in 1991. The Company will continue to
fund the actual net cash cost for postretirement benefits.
Net periodic postretirement benefit cost for 1993 and 1992 included the
following components:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1993 1992
- -------------------------------------------------------------------------------
<S> <C> <C>
Service cost - benefits earned
during the year. . . . . . . . . . . . . . . . . . $ 277 $ 258
Interest cost on accumulated
postretirement benefit obligation. . . . . . . . . 1,180 1,148
Net amortization and deferral. . . . . . . . . . . . 1
------ ------
Net periodic postretirement
benefit cost . . . . . . . . . . . . . . . . . . . $1,458 $1,406
====== ======
</TABLE>
The table below sets forth the plans' combined funded status reconciled with
the amount shown in the Company's statement of financial position at
December 31:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1993 1992
- -------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees and beneficiaries . . . . . . . . . . . . $12,967 $11,874
Fully eligible active plan
participants . . . . . . . . . . . . . . . . . . 1,866 1,243
Other active plan participants . . . . . . . . . . 4,687 3,080
------- -------
Accumulated postretirement
benefit obligation in excess
of plan assets . . . . . . . . . . . . . . . . 19,520 16,197
Unrecognized net loss from past
experience different from
that assumed . . . . . . . . . . . . . . . . . . . (2,926) (463)
------- -------
Accrued postretirement benefit cost. . . . . . . . . $16,594 $15,734
======= =======
</TABLE>
For measurement purposes, a 14 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1994; the rate was
assumed to decrease gradually to 5.5 percent by the year 2003 and remain at that
level thereafter. The health care cost trend rate assumption has a significant
effect on the amounts reported. To illustrate, increasing the assumed health
care cost trend rates by 1 percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1993, by
$1,927,000 and the aggregate of the service and interest cost components of net
periodic postretirement benefit cost for the year then ended by $325,000. The
weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.0 percent.
<PAGE>
NOTE 9 - STOCK OPTION AND INCENTIVE PLANS
The Company's stock option and stock award plans provide for the issuance of
up to 13,968,000 shares of common stock to key employees. As of December 31,
1993, 1992 and 1991, respectively, 507,618, 504,328 and 499,328 shares were
available for future grants under these plans.
Options are granted at prices equal to 100 percent of the market price on the
date of the grant and are exercisable over varying periods up to ten years from
the date of the grant. Shares subject to options granted but not exercised
become available for future grants. Option holders may deliver shares of common
stock of the Company in lieu of cash payment for shares purchased upon the
exercise of options under such plans.
At December 31, 1993, eleven participants hold options with expiration dates
ranging from 1999 to 2003 at option prices ranging from $12.63 to $22.31 per
share with a weighted-average option price of $14.50 per share.
Details of the stock option plans at December 31, 1993, 1992 and 1991, are:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
NUMBER OF OPTION PRICE
SHARES PER SHARE
- -------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at
December 31, 1990. . . . . . . . . . . . . . . . . 800,000 $12.35
Granted. . . . . . . . . . . . . . . . . . . . . . 90,000 18.72
Exercised. . . . . . . . . . . . . . . . . . . . . (80,000) 1.70
- -------------------------------------------------------------------------------
Outstanding at
December 31, 1991 and
December 31, 1992. . . . . . . . . . . . . . . . . 810,000 $14.11
Granted. . . . . . . . . . . . . . . . . . . . . . 10,000 21.34
Exercised. . . . . . . . . . . . . . . . . . . . . (110,000) 12.23
- -------------------------------------------------------------------------------
Outstanding at
December 31, 1993. . . . . . . . . . . . . . . . . 710,000 $14.50
===============================================================================
Exercisable at
December 31, 1993. . . . . . . . . . . . . . . . . 655,000 $14.11
===============================================================================
</TABLE>
In 1984, the Company adopted a Stock Award Plan for certain key executive
employees. Distribution of the shares will be made not less than three years nor
more than seven years from date of the grant. All shares granted under the plan
are subject to restrictions as to continuous employment, except in the case of
death, permanent disability or retirement. In addition, cash payments are made
during the grant period equal to the dividend on Bemis common stock. The cost of
the awards is charged to income over the period of the grant: $3,685,000 was
expensed in 1993, $3,264,000 in 1992 and $2,292,000 in 1991.
Details of the stock award plan at December 31, 1993, 1992 and 1991 are:
<TABLE>
<CAPTION>
NUMBER OF
SHARES
- -------------------------------------------------------------------------------
<S> <C>
Outstanding at December 31, 1990 . . . . . . . . . . . . . . . . . 912,864
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484,000
Cancelled. . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,812)
---------
Outstanding at December 31, 1991 . . . . . . . . . . . . . . . . . 1,383,052
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (236,000)
Cancelled. . . . . . . . . . . . . . . . . . . . . . . . . . . . (30,000)
---------
Outstanding at December 31, 1992 . . . . . . . . . . . . . . . . . 1,142,052
Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,446)
Cancelled. . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,290)
---------
Outstanding at December 31, 1993 . . . . . . . . . . . . . . . . . 1,124,316
=========
</TABLE>
NOTE 10 - LEASES
All noncancelable leases have been categorized as capital or operating
leases. The Company has leases for manufacturing plants, warehouses, machinery
and equipment and administrative offices with terms (including renewal options)
ranging from one to 45 years. Under most leasing arrangements, the Company pays
the property taxes, insurance, maintenance and expenses related to the leased
property. Total rental expense under operating leases was $10,268,000 in 1993,
$12,029,000 in 1992 and $10,375,000 in 1991.
The present values of minimum future obligations shown in the following chart
are calculated based on interest rates (ranging from 31/2 percent to 13 percent
with a weighted-average of approximately 103/4 percent) determined to be
applicable at the inception of the leases. Interest expense on the outstanding
obligations under capital leases was $418,000 in 1993, $469,000 in 1992 and
$547,000 in 1991.
Minimum future obligations on leases in effect at December 31, 1993, are:
<TABLE>
<CAPTION>
CAPITAL OPERATING
(IN THOUSANDS OF DOLLARS) LEASES LEASES
- -------------------------------------------------------------------------------
<S> <C> <C>
1994 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 670 $ 5,010
1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 670 2,977
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . 628 1,883
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . 645 818
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 416 597
Thereafter . . . . . . . . . . . . . . . . . . . . . . . 1,276 2,180
------ -------
Total minimum obligations. . . . . . . . . . . . . . . . 4,305 $13,465
=======
Less amount representing interest. . . . . . . . . . . . 1,408
------
Present value of net
minimum obligations. . . . . . . . . . . . . . . . . . 2,897
Less current portion . . . . . . . . . . . . . . . . . . 246
------
Long-term obligations. . . . . . . . . . . . . . . . . . $2,651
======
</TABLE>
Under the terms of a revolving credit agreement with fivebanks, the Company may
borrow up to $140,000,000 through August 1, 1998. The Company must pay a
facility fee of 1/8 of 1 percent annually on the entire amount of the commitment
and a commitment fee of 1/8 of 1 percent annually on the unused portion of the
commitment. There were no borrowings outstanding under this agreement at
December 31, 1993.
<TABLE>
<CAPTION>
(in thousands of dollars) 1993 1992
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial paper payable through 1994 at interest rates of 3% to 31/2% 1. . . . .$ 87,716 $ 82,585
91/8% senior notes due June 30, 1998 2 . . . . . . . . . . . . . . . . . . . . . . 8,594
Industrial revenue bonds payable through 2011 at interest rates of
3% to 71/4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,350 23,450
Debt of foreign subsidiaries payable through 1998 at interest rates of
6% to 75/8% 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,287 18,994
Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . 2,897 3,613
-------- --------
127,250 137,236
Less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,035 6,159
-------- --------
$123,215 $131,077
======== ========
<FN>
(1) The commercial paper has been classified as long-term debt in accordance
with the Company's intention and ability to refinance such obligations on
a long-term basis. The average interest rate of commercial paper
outstanding at December 31, 1993, was 31/2 percent. The maximum
outstanding at any month-end during 1993 was $119,233,000, and the average
outstanding during 1993 was $99,694,000. The weighted-average interest
rate during 1993 was 33/8 percent.
(2) On December 3, 1993, the Company retired $7,160,000 of the 91/8 percent
senior notes at a premium of $138,000 through the issuance of commercial
paper. The premium has been included as other costs (income) in the 1993
consolidated statement of income.
(3) The foreign debt consists primarily of borrowings made by a foreign
subsidiary. There are several notes payable to Belgium banks maturing
through 1998 at interest rates varying from 6 percent to 75/8 percent.
(4) Bank borrowings consist primarily of foreign bank overdrafts and bank
loans, all of which had been repaid at December 31, 1993. The maximum
outstanding at any month-end during 1993 was $1,883,000 and the average
outstanding during 1993 was $1,315,000. The approximate average interest
rate during 1993 was 13 percent.
</TABLE>
NOTE 12 - INCOME TAXES
<TABLE>
<CAPTION>
(in thousands of dollars) 1993 1992 1991
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. income before income taxes. . . . . . . . . . . . . . . . . $72,643 $80,554 $77,853
Non-U.S. income before income taxes. . . . . . . . . . . . . . . 5,404 11,882 14,603
Consolidating eliminations . . . . . . . . . . . . . . . . . . . (3,670) (2,150) (7,538)
------- ------- -------
Income before income taxes . . . . . . . . . . . . . . . . . . . $74,377 $90,286 $84,918
======= ======= =======
Income tax expense consists of the following components:
Current tax expense:
U.S. federal. . . . . . . . . . . . . . . . . . . . . . . $31,578 $27,498 $23,352
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . 1,544 3,429 4,690
State and local . . . . . . . . . . . . . . . . . . . . . 4,234 2,996 2,943
------- ------- -------
Total current tax expense. . . . . . . . . . . . . . . 37,356 33,923 30,985
------- ------- -------
(Prepaid) deferred tax expense:
U.S. federal . . . . . . . . . . . . . . . . . . . . . . (7,408) (1,395) 1,025
Foreign. . . . . . . . . . . . . . . . . . . . . . . . . (277) 180 (110)
State. . . . . . . . . . . . . . . . . . . . . . . . . . (1,371) 292
------- ------- -------
Total (prepaid) deferred tax expense. . . . . . . . . (9,056) (923) 915
------- ------- -------
Total income tax expense. . . . . . . . . . . . . . . $28,300 $33,000 $31,900
======= ======= =======
</TABLE>
continued
<PAGE>
NOTE 12 - INCOME TAXES CONTINUED
<TABLE>
<CAPTION>
Components of deferred (prepaid) tax expense are as follows:(in thousands of dollars)1991
- -----------------------------------------------------------------------------
<S> <C>
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . $1,019
Compensation expense. . . . . . . . . . . . . . . . . . . . (1,224)
Installment sales . . . . . . . . . . . . . . . . . . . . . (139)
Employee benefit plans. . . . . . . . . . . . . . . . . . . (73)
Inventory and uniform capitalization costing. . . . . . . . (528)
Restructuring costs . . . . . . . . . . . . . . . . . . . . 1,832
Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . 32
Miscellaneous items . . . . . . . . . . . . . . . . . . . . (4)
-----
Total deferred (prepaid) tax expense . . . . . . . . . . $ 915
======
<FN>
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities are presented below.
</TABLE>
<TABLE>
<CAPTION>
(in thousands of dollars) 1993 1992
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Accounts receivable, principally
due to allowances for returns
and doubtful accounts. . . . . . . . . . . . . . . . . . $ 2,538 $ 2,278
Inventories, principally due to
additional costs inventoried for
tax purposes pursuant to the
Tax Reform Act of 1986 . . . . . . . . . . . . . . . . . 5,876 5,110
Employee compensation and
benefits accrued for financial
reporting purposes . . . . . . . . . . . . . . . . . . . 9,861 5,745
Restructuring costs . . . . . . . . . . . . . . . . . . . . 9,374
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 785 1,477
------- -------
Deferred tax assets (included in
prepaid expenses and
deferred charges). . . . . . . . . . . . . . . . . . . . $28,434 $14,610
======= =======
</TABLE>
<TABLE>
<CAPTION>
(in thousands of dollars) 1993 1992
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax liabilities:
Plant and equipment, principally
due to differences in depreciation,
capitalized interest and
capitalized overhead . . . . . . . . . . . . . . . . . . $47,945 $44,370
Noncurrent employee compensation
and benefits accrued for financial
reporting purposes . . . . . . . . . . . . . . . . . . . (13,867) (10,649)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,736 (380)
------- --------
Deferred tax liabilities. . . . . . . . . . . . . . . . . . $35,814 $33,341
======= =======
</TABLE>
The Company's effective tax rate differs from the federal statutory rate due
to the following items:
<TABLE>
(in thousands of dollars) 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
% of Income % of Income % of Income
Amount Before Tax Amount Before Tax Amount Before Tax
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Computed "expected" tax
expense on income before
taxes at statutory rate . . . . . . . . . . . . . $26,032 35.0% $30,697 34.0% $28,872 34.0%
Increase (decrease) in taxes
resulting from:
Adjustment to deferred tax assets
and liabilities for enacted
changes in tax rates . . . . . . . . . . . . . 385 0.5
State and local income taxes net of
federal income tax benefit . . . . . . . . . . 1,861 2.5 2,170 2.4 1,956 2.3
Foreign tax rate differential . . . . . . . . . . (802) (1.1) (951) (1.0) (54) (0.1)
Minority interest . . . . . . . . . . . . . . . . 826 1.1 1,173 1.3 1,003 1.2
Miscellaneous items . . . . . . . . . . . . . . . (2) (89) (0.1) 123 0.2
------- ----- -------
Actual income tax expense. . . . . . . . . . . . . . . $28,300 38.0% $33,000 36.6% $31,900 37.6%
======= ===== ======= ===== ======= =====
</TABLE>
The Company's federal income tax returns for the years prior to 1989 have
been audited and completely settled.
Provision has not been made for U.S. or additional foreign taxes on
$66,977,000 of undistributed earnings of foreign subsidiaries as those earnings
are considered to be permanently reinvested in the operations of those
subsidiaries. It is not practicable to estimate the amount of tax that might be
payable on the eventual remittance of such earnings.
<PAGE>
NOTE 13 - SEGMENTS OF BUSINESS
The Company operates principally in two businesses (Flexible Packaging Products
and Specialty Coated and Graphics Products) and three geographical areas (U.S.,
Canada and Europe). A description of the Company's lines of business begins on
page four of the annual report.
<TABLE>
<CAPTION>
LINES OF BUSINESS. . . . . . .(in millions of dollars) 1993 1992 1991
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES TO UNAFFIATED CUSTOMERS:
Flexible Packaging Products . . . . . . . . . . . $ 905.3 $ 858.8 $ 836.5
Specialty Coated and Graphics Products. . . . . . 300.5 324.3 308.1
INTERSEGMENT SALES:
Flexible Packaging Products . . . . . . . . . . . (0.2) (0.1) (0.3)
Specialty Coated and Graphics Products. . . . . . (2.1) (1.7) (2.7)
-------- -------- --------
Total. . . . . . . . . . . . . . . . . . . . . $1,203.5 $1,181.3 $1,141.6
======== ======== ========
OPERATING PROFIT:
Flexible Packaging Products . . . . . . . . . . . $ 73.7 $ 79.2 $ 78.6
Specialty Coated and Graphics Products. . . . . . 28.4 40.2 38.9
-------- -------- --------
Total operating profit 1 . . . . . . . . . . . 102.1 119.4 117.5
General corporate expenses. . . . . . . . . . . . (18.1) (18.1) (17.8)
Interest expense. . . . . . . . . . . . . . . . . (7.2) (7.5) (12.1)
Minority interest in net income . . . . . . . . . (2.4) (3.5) (2.7)
-------- -------- --------
Income before income taxes . . . . . . . . . . $ 74.4 $ 90.3 $ 84.9
======== ======== ========
IDENTIFIABLE ASSETS:
Flexible Packaging Products . . . . . . . . . . . $551.9 $511.7 $481.1
Specialty Coated and Graphics Products. . . . . . 186.7 203.2 203.7
------ ------- -------
Total identifiable assets 2. . . . . . . . . . 738.6 714.9 684.8
Corporate assets 3. . . . . . . . . . . . . . . . 51.2 27.8 30.1
------ ------ ------
Total. . . . . . . . . . . . . . . . . . . . . $789.8 $742.7 $714.9
====== ====== ======
DEPRECIATION AND AMORTIZATION:
Flexible Packaging Products . . . . . . . . . . . $ 34.0 $ 35.2 $ 34.0
Specialty Coated and Graphics Products. . . . . . 11.8 11.9 11.9
Corporate . . . . . . . . . . . . . . . . . . . . 1.2 1.2 1.2
------ ------ ------
Total. . . . . . . . . . . . . . . . . . . . . $ 47.0 $ 48.3 $ 47.1
====== ====== ======
EXPENDITURES FOR PROPERTY AND EQUIPMENT:
Flexible Packaging Products . . . . . . . . . . . $ 52.6 $ 59.0 $ 44.9
Specialty Coated and Graphics Products. . . . . . 7.0 10.9 9.4
Corporate . . . . . . . . . . . . . . . . . . . . 1.1 0.8 2.6
------ ------ ------
Total. . . . . . . . . . . . . . . . . . . . . $ 60.7 $ 70.7 $ 56.9
====== ====== ======
<FN>
(1) Operating profit is total revenue less operating expenses.
(2) Identifiable assets by lines of business include only those assets that are
specifically identified with that segment's operations.
(3) Corporate assets are principally cash and short-term investments, prepaid
expenses and corporate property.
</TABLE>
Continued
<PAGE>
NOTE 13 - SEGMENTS OF BUSINESS CONTINUED
<TABLE>
<CAPTION>
OPERATIONS BY GEOGRAPHIC AREAS(in millions of dollars) 1993 1992 1991
<S> <C> <C> <C>
Net Sales to
Unaffiliated Customers: United States . . . . . . . . $1,031.6 $ 975.8 $ 942.8
Canada. . . . . . . . . . . . 42.4 47.3 49.5
Europe. . . . . . . . . . . . 147.6 175.9 164.3
Eliminations. . . . . . . . . (18.1) (17.7) (15.0)
-------- -------- --------
Total . . . . . . . . . . . $1,203.5 $1,181.3 $1,141.6
======== ======== ========
Operating Profit: United States. . . . . . . . . . . $ 96.8 $ 106.1 $ 107.2
Canada . . . . . . . . . . . . . . 2.7 3.2 5.6
Europe . . . . . . . . . . . . . . 5.6 12.8 12.9
Eliminations . . . . . . . . . . . (3.0) (2.7) (8.2)
-------- -------- --------
Total . . . . . . . . . . . . . . $ 102.1 $ 119.4 $ 117.5
======== ======== ========
Identifiable Assets: United States . . . . . . . . . . $ 608.6 $ 566.1 $ 526.7
Canada. . . . . . . . . . . . . . 29.4 31.9 36.1
Europe. . . . . . . . . . . . . . 107.6 122.3 126.3
Eliminations. . . . . . . . . . . (7.0) (5.4) (4.3)
-------- -------- -------
Total . . . . . . . . . . . . . $ 738.6 $ 714.9 $ 684.8
======== ======== ========
</TABLE>
NOTE 14 - CONTINGENCIES
The Company is defendant in lawsuits incidental to its business. The
management of the Company believes, however, that the disposition of these
lawsuits will not have any material effect on the financial position and
operating results of the Company.
NOTE 15 - SUBSEQUENT EVENTS
On January 3, 1994, the Company, through its subsidiary, Morgan Adhesives
Company, acquired Fitchburg Coated Products. Fitchburg operates a
pressure-sensitive materials manufacturing plant in Scranton, Pennsylvania, and
has sales of approximately $80 million. On January 20, 1994, the Company,
through its subsidiary, Curwood, Inc., acquired the Hargro Health Care business.
Hargro Health Care operates from a manufacturing plant in Chicago, Illinois, and
has annual sales of approximately $17 million. The combined net purchase price
of $34 million will be accounted for as a purchase of assets. Pro forma
financial information is not presented as these acquisitions would not have had
a significant impact on 1993's operations.
NOTE 16 - QUARTERLY FINANCIAL INFORMATION - UNAUDITED
(in millions of dollars except EPS)
<TABLE>
<CAPTION>
Quarterly
Results Net Sales Gross Profit Net Income Earnings Per Share
- --------------------------------------------------------------------------------------------------------------------------------
% % % %
Quarter 1993 1992 Change 1993 1992 Change 1993 1992 Change 1993 1992 Change
- ------- ---------------------------- ------------------------ -------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First A. . . . $ 292.6 $ 289.6 1% $ 63.8 $ 65.4 (2)% $10.7 $10.7 0% $.21 $ .21 0%
Second . . . . 303.3 297.5 2 68.6 70.7 (3) 15.5 15.5 0 .30 .30 0
Third(B)(D). . 299.5 292.6 2 65.8 67.3 (2) 1.0 14.5 (93) .02 .28 (93)
Fourth C . . . 308.1 301.6 2 79.2 69.5 14 18.9 16.6 13 .36 .32 13
. . . . . . .
Total. . . . . 1,203.5 1,181.3 2 277.4 272.9 2 46.1 57.3 (20) .89 1.11 (20)
-------------------------- ------------------------ --------------------- ------------------------
Cumulative effect
on prior years of
accounting changes (1.8) (0.3) (.03) (.01)
--------------------- ------------------------
Total Year . . $1,203.5 $1,181.3 2% $277.4 $272.9 2% $44.3 $57.0 (22)% $.86 $1.10 (22)%
=========================== ========================= ===================== =========================
<FN>
(A) In the first quarter of 1993, the Company completed the sale of a European
pressure-sensitive product line, sold two rigid container molding
operations, and acquired the Bakery Products Division of Princeton Packaging
Incorporated.
(B) During the third quarter of 1993 the Company recorded a $13.1 after-tax
($.25 per share) restructuring charge.
(C) Reductions in material cost of sales combined with improved manufacturing
performance resulted in increased gross profits during the fourth quarter of
1993.
(D) Federal tax law changes enacted in the third quarter of 1993, but
retroactive to the beginning of the year, decreased Net Income by $.9 in the
third quarter and $1.2 or $.02 per share for the year.
</TABLE>
<PAGE>
BEMIS COMPANY, INC.
222 South 9th Street, Suite 2300
Minneapolis, Minnesota
55402-4099
(612) 376-3000
Benjamin R. Field, III
Senior Vice President, Chief
Financial Officer and Treasurer
<PAGE>
EXHIBIT 22 - PARENT AND SUBSIDIARIES OF THE REGISTRANT
The Company has no parent. The following were subsidiaries of the
Company as of December 31, 1993.
Percentage of
Voting
Jurisdiction Securities
of Owned By
Name Organization Immediate Parent
- ----------------------------------------- ------------ ----------------
Bemis Company, Inc. (the "Registrant")
Bemis Maral, S. A. Mexico 49%
Bemis Export Co., Ltd. Jamaica 80%
Bemis Canada Limited Canada 100%
Curwood, Inc. Delaware 100%
Curwood Packaging (Canada) Limited Canada 100%
Hayssen Manufacturing Company Delaware 100%
Hayssen Europa Limited United Kingdom 100%
Hayssen Europa G.m.b.H. Germany 100%
Hayssen Europa S.R.L. Italy 100%
Hayssen Mexico S.A. de C.V. Mexico 100%
MacKay Gravure Systems, Inc. Kentucky 100%
Mankato Corporation Delaware 100%
Master Palletizer Systems, Inc. Colorado 100%
Milprint, Inc. Wisconsin 100%
<PAGE>
Percentage of
Voting
Jurisdiction Securities
of Owned By
Name Organization Immediate Parent
- ---------------------------------------- ------------ ----------------
Morgan Adhesives Company Ohio 86.9%
MACtac Europe, S. A. Belgium 100%
Bemis Coordination Center, S. A. Belgium 100%
Morgan Adhesives, G.m.b.H. Germany 100%
MACtac France, S.a.r.L. France 100%
MACtac Scandinavia, A. B. Sweden 100%
MACtac Canada Ltd/Ltee Canada 100%
MACtac U.K. Limited United Kingdom 100%
MACtac, A. G. Switzerland 100%
MACtac Mexico, S. A. Mexico 49%
Accraply, Inc. Ohio 100%
Bemis Export Co., Ltd. Jamaica 20%
Pervel Industries, Inc. Delaware 100%
