<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Three Months Ended March 31, 1995
Commission File Number 1-5277
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) (Zip Code)
Registrant's telephone number including area code (612) 376-3000
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
51,490,961 shares at $27.75 per share
as of April 28, 1995 - $1,428,874,000
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements, enclosed as Exhibit 21, are incorporated by
reference in this Form 10-Q.
In the opinion of management, the financial statements reflect all
adjustments necessary to a fair statement of the results for the three months
ended March 31, 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net Sales for the first quarter of 1995 were $368.6 million compared to
$323.3 million for the first quarter of 1994, an increase of 14.0% or $45.3
million. Net Income was $16.1 million for the first quarter of 1995 and $13.6
million for the same quarter in 1994, an increase of 18.4%.
Both the Flexible Packaging and the Specialty Coated and Graphics Products
Lines of Business had increases in Sales and Operating Profits over the first
quarter of 1994, with the Specialty Coated and Graphics Products reflecting the
most significant increases.
Addressing the Statement of Income line item changes of consequence:
Cost of Products Sold increased 15.8% compared to Net Sales increases of
14.0%. Despite numerous sales price increases in 1994 and lower
manufacturing overhead compared to 1994, to date we have not fully offset
the full impact of multiple raw material price increases incurred since
early 1994. While upward pressure on raw material costs continued in the
first quarter of 1995, we expect these increases will be less severe than
in 1994.
Selling, General and Administrative Expenses were 12.3% of Net Sales for
the current quarter compared to 13.8% in the first quarter of 1994 on a
14.0% increase in Net Sales, reflecting cost control efforts and economies
available through increasing volume.
Lower Research and Development expenditures resulted from reduced product
development expense in our Packaging Machinery business segment.
Increasing interest rates and a higher debt level, required to sustain
increased working capital and our capital expenditure program, account for
the $1.4 million rise in Interest Expense.
Other Income increased $.3 million largely due to currency exchange gains
experienced in the first quarter of 1995 versus losses experienced in the
first quarter of 1994.
Minority Interest increases reflect improvements in our Pressure-Sensitive
Materials business segment.
- 2 -
<PAGE>
PART I - FINANCIAL INFORMATION
In summary, Pretax Income increased $3.8 million or 17.3% on a 14% increase
in Net Sales with lower overhead expense in relation to sales more than
offsetting the effect of higher material costs and interest.
Income Tax expense increased $1.3 million or 15.5%. The effective tax rate
for the first quarter of 1995 and 1994 was 37.6% and 38.2%, respectively.
The $20.3 million increase in Long-Term Debt results from increased working
capital and capital equipment expenditures. The working capital increase
relates principally to higher inventory required to sustain increased business
volume and as a hedge against material cost increases.
In the third quarter of 1993, a restructuring plan was announced for our
Flexible Packaging Products line of business. The objective of this plan was to
increase profitability through improved operating efficiency. This plan
resulted in a $21 million pretax charge to Other Costs in the third quarter of
1993 and was expected to produce annual pretax savings of $8 million when fully
implemented.
Key aspects of the plan included redeployment of assets in both the
domestic and international packaging machinery businesses ($7.2 million), the
closedown of a U.S. nylon resin production facility ($6.2 million), the
consolidation of two paper packaging plants into larger facilities ($5.0
million), and $2.6 million for all other expenses principally related to the
write-off of nonproductive assets in the coated
and laminated film business.
All facility closures and consolidations were essentially completed as of
the end of 1994. One sublease and one plant sale are pending completion in 1995
as well as some ongoing severance payments and project costs. Because of these
pending transactions and final restructuring actions, final adjustments to the
reserve have not yet been made, however, no material gain or loss is expected.
Of the $21 million total restructuring expenses, we expected $11.4 million
of non-cash cost and $9.6 million of net cash expense, all of which would be
internally generated. Through March 31, 1995, our cash costs have totalled $4.9
million and non-cash costs $15.1 million. The remaining $1.0 million reserve is
expected to be sufficient to absorb remaining cash and non-cash expenses
required to finalize this effort in 1995.
- 3 -
<PAGE>
PART I - FINANCIAL INFORMATION
FINANCIAL CONDITION
A statement of cash flow for the three months ended March 31, 1995, is as
follows:
<TABLE>
<CAPTION>
Millions
--------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................................... $16.1
Non-cash items:
Depreciation and amortization............................... 15.0
Minority interest........................................... 1.0
Deferred income taxes, non-current portion.................. 2.1
Net increase in working capital items....................... (25.1)
Net change in deferred charges and credits.................. 0.3
Other....................................................... 0.7
-----
Net cash provided by operating activities........................ 10.1
-----
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment.......................... (24.2)
Other........................................................ 0.2
-----
Net cash used in investing activities........................... (24.0)
-----
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in long-term debt................................... 19.4
Cash dividends paid.......................................... (8.2)
Stock incentive programs..................................... 3.5
-----
Net cash provided by financing activities....................... 14.7
-----
Effect of exchange rates........................................ 1.9
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Net increase in cash............................................ $ 2.7
-----
-----
</TABLE>
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<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no significant changes during the three months ended March
31, 1995.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 21 - Financial Statements Furnished to Security Holders.
Exhibit 27 - Financial Data Schedule
SIGNATURES
Pursuant to the requirements 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.
Date May 1, 1995 S\ LeRoy F. Bazany
--------------------- -------------------------------
LeRoy F. Bazany, Vice President
and Controller
Date May 1, 1995 S\ B. R. Field, III
---------------------- -----------------------------------
Benjamin R. Field, III, Senior Vice
President, Chief Financial Officer
and Treasurer
- 5 -
<PAGE>
EXHIBIT 21 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-----------------------
1995 1994
---- ----
<S> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $368,551 $323,277
Costs and expenses:
Cost of products sold . . . . . . . . . . . . . . . . . . . . . . 290,692 250,978
Selling, general and administrative expenses. . . . . . . . . . . 45,333 44,494
Research and development. . . . . . . . . . . . . . . . . . . . . 3,257 3,798
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . 3,029 1,616
Other (income). . . . . . . . . . . . . . . . . . . . . . . . . . (538) (199)
Minority interest in net income . . . . . . . . . . . . . . . . . 988 602
-------- --------
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . 25,790 21,988
Taxes based on income - cash. . . . . . . . . . . . . . . . . . . 7,588 7,962
Taxes based on income - deferred. . . . . . . . . . . . . . . . . 2,112 438
-------- --------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,090 $ 13,588
-------- --------
-------- --------
Earnings per share of common stock . . . . . . . . . . . . . . . . . . $.31 $.26
---- ----
---- ----
Cash dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . $.16 $.135
---- ----
---- ----
Average common shares and common
stock equivalents outstanding . . . . . . . . . . . . . . . . . . . 51,877 51,890
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</TABLE>
<PAGE>
EXHIBIT 21 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Mar 31 Dec 31
ASSETS 1995 1994
---- ----
<S> <C> <C>
Cash . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,432 $ 12,726
Accounts receivable - net. . . . . . . . . . . . . . . 195,662 197,164
Inventories. . . . . . . . . . . . . . . . . . . . . . 181,444 168,153
Prepaid expenses and deferred charges. . . . . . . . . 42,074 40,829
-------- --------
Total current assets . . . . . . . . . . . . . . . . 434,612 418,872
-------- --------
Property and equipment, net. . . . . . . . . . . . . . 471,906 461,316
Excess of cost of investments in
subsidiaries over net assets acquired . . . . . . . 29,557 29,743
Other assets . . . . . . . . . . . . . . . . . . . . . 13,405 13,408
-------- --------
Total. . . . . . . . . . . . . . . . . . . . . . . . 42,962 43,151
-------- --------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $949,480 $923,339
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings. . . . . . . . . . . . . . . . . $ 1,671 $ 1,671
Current portion of long-term debt. . . . . . . . . . . 776 753
Accounts payable . . . . . . . . . . . . . . . . . . . 149,356 159,272
Accrued salaries and wages . . . . . . . . . . . . . . 23,361 31,956
Accrued income and other taxes . . . . . . . . . . . . 22,243 17,166
-------- --------
Total current liabilities. . . . . . . . . . . . . . 197,407 210,818
Long-term debt, less current portion . . . . . . . . . 192,019 171,728
Deferred taxes . . . . . . . . . . . . . . . . . . . . 42,218 40,013
Other liabilities and deferred credits . . . . . . . . 59,029 58,823
-------- --------
Total liabilities. . . . . . . . . . . . . . . . . . 490,673 481,382
-------- --------
Minority interest. . . . . . . . . . . . . . . . . . . 25,491 23,930
STOCKHOLDERS' EQUITY:
Common stock (56,003,366 and 55,723,731 shares). . 5,600 5,572
Capital in excess of par value . . . . . . . . . . 104,711 101,290
Retained income. . . . . . . . . . . . . . . . . . 447,215 439,364
Cumulative translation adjustment. . . . . . . . . 9,283 5,294
Common stock held in treasury (4,512,405 shares) . (133,493) (133,493)
-------- --------
Total stockholders' equity . . . . . . . . . . . . . 433,316 418,027
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . $949,480 $923,339
-------- --------
-------- --------
</TABLE>
<PAGE>
EXHIBIT 21 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 16,090 $13,588
NON-CASH ITEMS:
Depreciation and amortization. . . . . . . . . . . . . 14,948 13,348
Minority interest. . . . . . . . . . . . . . . . . . . 988 602
Deferred income taxes, non-current portion . . . . . . 2,147 542
(Gain) loss on sale of property and equipment. . . . . (3) 51
-------- --------
Cash provided by operations. . . . . . . . . . . . . . . . 34,170 28,131
Net change in receivables, inventories,
prepaid expenses and payables . . . . . . . . . . . . . (25,148) 5,103
Net change in deferred charges and credits . . . . . . . . 345 (4,103)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 667 (160)
-------- --------
Net cash provided by operating activities. . . . . . . . . 10,034 28,971
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment. . . . . . . . . . . . (24,199) (27,110)
Business acquisitions. . . . . . . . . . . . . . . . . . . 0 (33,248)
Proceeds from sale of property and equipment . . . . . . . 250 189
Change in long-term receivables. . . . . . . . . . . . . . (10) 88
-------- --------
Net cash used in investing activities. . . . . . . . . . . (23,959) (60,081)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term debt . . . . . . . . . . . . . . . . 19,398 40,614
Change in short-term debt. . . . . . . . . . . . . . . . . 133 (202)
Cash dividends paid. . . . . . . . . . . . . . . . . . . . (8,239) (6,913)
Stock incentive programs . . . . . . . . . . . . . . . . . 3,449 83
-------- --------
Net cash provided by financing activities. . . . . . . . . 14,741 33,582
-------- --------
Effect of exchange rates on cash . . . . . . . . . . . . . 1,890 428
-------- --------
Net increase in cash . . . . . . . . . . . . . . . . . . . $ 2,706 $ 2,900
-------- --------
-------- --------
</TABLE>
<PAGE>
EXHIBIT 21 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS
BEMIS COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TAXES BASED ON INCOME
The Company's 1995 effective tax rate of 38% differs from the federal
statutory rate of 35% primarily due to state and local income taxes.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the March
31, 1995, Consolidated Statement of Income and Consolidated Balance Sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1995
<PERIOD-END> MAR-31-1995
<CASH> 15,432
<SECURITIES> 0
<RECEIVABLES> 195,662
<ALLOWANCES> 0
<INVENTORY> 181,444
<CURRENT-ASSETS> 434,612
<PP&E> 724,647
<DEPRECIATION> (252,741)
<TOTAL-ASSETS> 949,480
<CURRENT-LIABILITIES> 197,407
<BONDS> 192,019
<COMMON> 0
0
5,600
<OTHER-SE> 427,716
<TOTAL-LIABILITY-AND-EQUITY> 949,480
<SALES> 368,551
<TOTAL-REVENUES> 368,551
<CGS> 290,692
<TOTAL-COSTS> 290,692
<OTHER-EXPENSES> (538)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,029
<INCOME-PRETAX> 25,790
<INCOME-TAX> 9,700
<INCOME-CONTINUING> 16,090
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,090
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
