<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, 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)
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, par value $.10 per share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
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
_________ _________
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant on March 1, 1996, based on a closing price of $30.88 per share as
reported on the New York Stock Exchange, was $1,467,170,000. As of March 1,
1996, the Registrant had 52,567,339 shares of Common Stock issued and
outstanding.
Documents Incorporated by Reference
___________________________________
1995 Annual Report to Shareholders - Part I and Part II
Proxy Statement - Annual Meeting of Stockholders
May 2, 1996 - Part I and Part III
<PAGE>
ITEM 1 - BUSINESS
Bemis Company, Inc., a Missouri corporation (the "Registrant"), 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 selling to customers throughout the
United States, Canada, and Europe. In 1995, approximately 72% of the
Registrant's sales were derived from flexible packaging products and
approximately 28% were derived from specialty coated and graphics products. The
primary market for its products is the food industry; other markets include
companies in chemical, agribusiness, pharmaceutical, medical, printing, and
graphic industries. Further information about the Registrant's operations in
different business segments appearing on page 38 of the accompanying 1995 Annual
Report to Shareholders is expressly incorporated by reference in this Form 10-K
Annual Report.
As of December 31, 1995, the Registrant had approximately 8,500 employees,
of which an estimated 5,800 were classified as production employees. Most of
the production employees are covered by collective bargaining contracts
involving five different international unions and 19 individual contracts with
terms ranging from three to five years. During 1995, five contracts covering
approximately 950 employees at five different locations in the United States
were successfully negotiated. During 1996, three domestic labor agreements and
two Canadian 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
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the Registrant's results as a whole or either of its segments. The business of
each of the segments is not seasonal to any 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 consisting of coated and
laminated films, polyethylene packaging, packaging machinery, and industrial and
consumer paper bag packaging.
Coated and laminated film products include flexible polymer film structures
and barrier laminates for food, medical, and personal care products utilizing
controlled and modified atmosphere packaging and complementary packaging
machinery systems, with value added through printing. Primary markets are
processed meat, cheese, coffee, condiments, and candy. Additional products
include a full line of blown and cast stretchfilm products, carton sealing tapes
and application equipment for industrial use, and custom thermoformed plastic
packaging. Coated and laminated films accounted for 31 percent, 31 percent, and
32 percent of consolidated net sales for the years 1995, 1994, and 1993,
respectively.
Polyethylene packaging consists of mono-layer and coextruded films,
converted packaging and roll stock, flexographic line and process printed
packaging for bakery products, seed, retail, lawn and garden, ice, fresh and
frozen produce, and candy; printed shrink overwrap for the food and beverage
industry; extruded products including wide width sheeting, bags on a roll,
balers, pass-through and stretch palletizing film, and shrink pallet covers.
Polyethylene products accounted for 17 percent, 16 percent, and 16 percent of
consolidated net sales for the years 1995, 1994, and 1993, respectively.
Packaging machinery products include consumer packaging machinery and
systems for flexible packaging including vertical and horizontal form/fill/seal
pouch packaging; equipment which weighs pieces, powders, and liquids for food,
chemical, and industrial products, and stand-up pouch packaging systems. The
Registrant also makes industrial packaging machinery, including automated bag
handling, weighing, filling, closing, sealing, and palletizing equipment for
multiwall paper open-mouth and valve bags, and poly open-mouth bags, Bulk-Pak
polyethylene liner insertion equipment for bag-in-
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box systems, and vertical form/fill/seal machinery for large bags. Packaging
machinery accounted for 8 percent, 8 percent, and 9 percent of consolidated net
sales for the years 1995, 1994, and 1993, respectively.
Industrial and consumer paper bag packaging is made up of multiwall and
small paper bags, balers, printed paper roll stock, and bag closing materials
for industrial and consumer packaging products. Flexographic and rotogravure
printing are enhanced with in-line overlaminating capabilities. Innovations in
bag constructions include inner-ply laminations of odor, grease, and moisture
barriers. Primary markets include pet food, seed, chemicals, dairy products,
fertilizers, feed, minerals, flour, rice, sugar, and coffee beans. Sales of
this product line accounted for 15 percent, 15 percent, and 17 percent of
consolidated net sales for the years 1995, 1994, and 1993, respectively.
SPECIALTY COATED AND GRAPHICS PRODUCTS - The Registrant manufactures pressure-
sensitive materials such as sheet printing products, roll label products, and
technical products and graphic films.
Sheet printing products include pressure-sensitive paper, film, and foil
sheet printing products and laser printing products for the sheet-fed printing
industry. In addition, the Registrant provides laser printer sheet stocks, pre-
die-cut printing labels, copier labels, data processing labels, and non-impact
printer products, which are designed to run on business equipment such as laser
printers and xerographic copiers.
Roll label products include narrow-web rolls of pressure-sensitive film,
paper, and foil printing stocks used in high-speed printing and die-cutting of
primary package labeling, secondary or promotional decoration, and for high-
speed, high-volume data processing (EDP) stocks, bar code inventory control
labels, and numerous laser printing applications.
Technical products and graphic films are pressure-sensitive materials that
are technically engineered for performance in varied industrial or graphic
application. They include micro-thin film adhesives used in delicate electronic
parts assembly, pressure-sensitives utilizing foam and tape based stocks to
perform fastening and mounting functions, optically clear films with built-in UV
inhibitors for photo murals, and decorative markings.
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<PAGE>
Pressure-sensitive materials accounted for 28 percent, 29 percent, and
24 percent of consolidated net sales for the years 1995, 1994, and 1993,
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 percent 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, Scandinavia, Australia, and
Mexico to provide prompt and economical service to more than 30,000
customers. The Registrant's technically trained sales force is supported by
product development engineers, design technicians, and a customer service
organization.
No single customer accounts for 10 percent or more of the Registrant's
total sales of both 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 the number of
competing firms.
Major competitors in the Flexible Packaging Products segment include
American National Can Company, Printpack, Inc., James River Corporation,
Cryovac, a division of W.R. Grace & Co., Huntsman Chemical Corporation, AEP
Industries, Inc., Stone Container Corporation, and Union Camp Corporation. In
the Specialty Coated and Graphics Products segment major competitors include
Avery-Dennison Corporation, Flexcon Co., Inc., Minnesota Mining and
Manufacturing Company, Jackstadt GmbH (Germany), and Haarla (Finland).
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.
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Advertising is limited primarily to business and trade publications
emphasizing 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>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Flexible Packaging Products $ 8,813,000 $ 9,132,000 $ 9,910,000
Specialty Coated and Graphics Products 4,790,000 3,992,000 4,174 000
---------- ---------- ----------
Total $13,603,000 $13,124 000 $14,084,000
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
ENVIRONMENTAL 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,
1995, were as follows:
FLEXIBLE PACKAGING PRODUCTS - The Registrant has 31 manufacturing plants located
in 14 states and one foreign country, of which 26 are owned directly by the
Registrant or its subsidiaries and five are leased from outside parties. Leases
generally provide for minimum terms of three to 10 years and have
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one or more five-year renewal options. The initial terms of leases in effect at
December 31, 1995, expire between 1996 and 2004.
SPECIALTY COATED AND GRAPHICS PRODUCTS - The Registrant has ten manufacturing
plants located in five states and three foreign countries, of which seven are
owned directly by the Registrant or its subsidiaries and three are leased from
outside parties. 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, 1995, 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 environmental
related litigation, incidental to its business. Although it is difficult to
predict the ultimate outcome of these cases, management believes, based on
consultation with counsel, that any ultimate liability would not have a material
adverse effect upon the Registrant's business, operating results, or financial
condition.
The Registrant is a potentially responsible party (PRP) in approximately
seventeen superfund sites around the United States. In substantially all cases,
the Registrant is a "de minimis" PRP and has negotiated a position as such. In
addition, the Registrant has full insurance protection at seven of these sites
and 50% insurance protection at three of these sites. The Registrant has
reserved an amount that it believes to be adequate to cover its exposure.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None
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<PAGE>
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The information required by this item appearing on pages 1 and 22 of the
accompanying 1995 Annual Report to Shareholders is expressly 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 1995 Annual Report to Shareholders is expressly 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 20 to 22 of the
accompanying 1995 Annual Report to Shareholders is expressly 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 LLP dated January 22, 1996, and the quarterly data appearing on
pages 24 to 39 of the accompanying 1995 Annual Report to Shareholders are
expressly 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 1995 Annual Report to
Shareholders is not to be deemed filed as part of this Form 10-K Annual
Report.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
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<PAGE>
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required to be submitted in response to this item with
respect to directors is omitted because a definitive proxy statement containing
such information will be filed with the Securities and Exchange Commission
pursuant to Regulation 14A within 120 days after December 31, 1995, and such
information is expressly incorporated herein by reference.
The following sets forth the name, age, and business experience for the
last five years of the principal executive officers of the Registrant. 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 63 Vice President and Controller 1982 to present
Jeffrey H. Curler 45 Executive Vice President 1991 to present
President - Curwood, Inc. (1) 1982 to present
Benjamin R. Field, III 57 Senior Vice President, Chief
Financial Officer and Treasurer 1992 to present
Vice President and Treasurer 1982 to 1992
Scott W. Johnson 55 Senior Vice President, General
Counsel and Secretary 1992 to present
Vice President - General Counsel
and Secretary 1988 to 1992
Robert F. Mlnarik 54 Executive Vice President 1991 to present
President and Chief Executive
Officer - Morgan Adhesives Co. (2) 1986 to present
John H. Roe 56 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 55 Vice President - Human Resources 1990 to present
Director, Personnel - Industrial Relations 1985 to 1990
</TABLE>
(1) Curwood, Inc. is a 100 percent owned subsidiary of the Registrant.
(2) Morgan Adhesives Co. is an 86.9 percent owned subsidiary of the Registrant.
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<PAGE>
ITEM 11 - EXECUTIVE COMPENSATION
The information required to be submitted in response to this item is
omitted because a definitive proxy statement containing such information will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A
within 120 days after December 31, 1995, and such information is expressly
incorporated herein by reference.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The information required to be submitted in response to this item is
omitted because a definitive proxy statement containing such information will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A
within 120 days after December 31, 1995, and such information is expressly
incorporated herein by reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required to be submitted in response to this item is
omitted because a definitive proxy statement containing such information will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A
within 120 days after December 31, 1995, and such information is expressly
incorporated herein by reference.
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<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 *
(1) FINANCIAL STATEMENTS: ---------------
---------------------
<S> <C>
Report of Independent Accountants. . . . . . . . . . . . 24
Consolidated Statement of Income for
the Three Years Ended December 31, 1995 . . . . . . 25
Consolidated Balance Sheet
at December 31, 1995 and 1994 . . . . . . . . . . . 26-27
Consolidated Statement of Cash Flows for
the Three Years Ended December 31, 1995 . . . . . . 28-29
Consolidated Statement of Stockholders' Equity
for the Three Years Ended December 31, 1995 . . . . 30
Notes to Consolidated Financial Statements . . . . . . . 31 to 39
*Incorporated by reference from the indicated pages of
the 1995 Annual Report to Shareholders.
</TABLE>
<TABLE>
<CAPTION>
Pages in
Form 10-K
---------
(2) FINANCIAL STATEMENT SCHEDULES FOR YEARS 1995, 1994, AND 1993
------------------------------------------------------------
<S> <C>
Report of Independent Accountants on Financial Statement
Schedules for the Three Years Ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . 13
Schedule V - Property and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 to 18
Schedule VI - Accumulated Depreciation
of Property and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 to 21
Schedule VIII - Valuation and Qualifying Accounts and Reserves . . . . . . . . . . . . . . . . . . 22
Schedule X - Supplementary Income Statement Information . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
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<PAGE>
(3) EXHIBITS
3(a) Articles of Incorporation of the Registrant, as amended. (1)
3(b) By-Laws of the Registrant, as amended. (4)
4(a) Rights Agreement, dated as of August 3, 1989, between Bemis
Company, Inc. and Norwest Bank Minnesota, National Association. (2)
4(b) Form of Indenture dated as of June 15, 1995, between the Registrant
and First Trust National Association, as Trustee. (5)
10(a) Bemis Company, Inc. 1987 Stock Option Plan. * (1)
10(b) Bemis Company, Inc. 1994 Stock Incentive Plan. * (3)
10(c) Bemis Company, Inc. 1984 Stock Award Plan. * (4)
10(d) Bemis Retirement Plan, as amended effective January 1, 1994. * (4)
10(e) Bemis Company, Inc. Supplemental Retirement Plan dated October 20,
1988. * (4)
10(f) Bemis Executive Incentive Plan dated April 1, 1990. * (4)
10(g) Bemis Company, Inc. Long Term Deferred Compensation Plan. * (4)
10(h) Amended and Restated Credit Agreement among Bemis Company, Inc.,
the Banks Listed therein and Morgan Guaranty Trust Company of New
York, as Agent, originally dated as of August 1, 1986, Amended and
Restated as of August 1, 1991, as amended by Amendment No. 1 dated
as of May 1, 1992, as amended by Amendment No. 2 dated December 1,
1992, as amended by Amendment No. 3 dated January 22, 1993, as
amended by Amendment No. 4 dated March 15, 1994, as amended by
Amendment No. 5 dated June 1, 1994; and as amended by Amendment No.
6 dated February 1, 1995. (4)
13 1995 Annual Report to Shareholders
22 Subsidiaries of the Registrant
27 Financial Data Schedule (EDGAR electronic filing only).
(b) There were no reports on Form 8-K filed during the fourth quarter ended
December 31, 1995.
_____________
* Management contract, compensatory plan or arrangement filed pursuant
to Rule 601(b)(10)(iii)(A) of Regulation S-K under the Securities
Exchange Act of 1934.
(1) Incorporated by reference to the Registrant's Registration Statement
on Form S-8 (File No. 33-50560).
(2) Incorporated by reference to the Registrant's Registration Statement
on Form 8-A dated August 4, 1989 (File No. 0-1387).
(3) Incorporated by reference to the Registrant's Registration Statement
on Form S-8 (File No. 33-80666).
(4) Incorporated by reference to the Registrant's Annual Report on Form
10-K/A for the year ended December 31, 1994 (File No. 1-5277).
(5) Incorporated by reference to the Registrant's Current Report on Form
8-K dated june 30, 1995 (File No. 1-5277).
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<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 22, 1996, appearing on page 24 of the 1995 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.
s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Minneapolis, Minnesota
January 22, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-8 (number 2-61796)
and Form S-3 (number 33-60253) of Bemis Company, Inc. of our report dated
January 22, 1996, 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.
s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Minneapolis, Minnesota
March 1, 1996
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<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.
s/ Benjamin R. Field, III s/ LeRoy F. Bazany
By------------------------------- By--------------------------------
Benjamin R. Field, III, Senior Vice LeRoy F. Bazany, Vice President
President, Chief Financial Officer and Controller
and Treasurer
Date - March 1, 1996 Date - March 1, 1996
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.
s/ Howard Curler s/ Winslow H. Buxton
- --------------------------------- ----------------------------------
Howard Curler, Director Winslow H. Buxton, Director
Date - March 1, 1996 Date - March 1, 1996
s/ John H. Roe s/ Loring W. Knoblauch
- --------------------------------- ----------------------------------
John H. Roe, President and Chief Loring W. Knoblauch, Director
Executive Officer; Director
Date - March 1, 1996 Date - March 1, 1996
s/ Robert A. Greenkorn s/ Angus Wurtele
- --------------------------------- ----------------------------------
Robert A. Greenkorn, Director Angus Wurtele, Director
Date - March 1, 1996 Date - March 1, 1996
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<PAGE>
EXHIBIT INDEX
EXHIBITS FORM OF FILING
3(a) Articles of Incorporation of the Registrant, as amended. (1)
3(b) By-Laws of the Registrant, as amended. (4)
4(a) Rights Agreement, dated as of August 3, 1989, between Bemis
Company, Inc. and Norwest Bank Minnesota, National Association. (2)
4(b) Form of Indenture dated as of June 15, 1995, between the Registrant and
First Trust National Association, as Trustee. (5)
10(a) Bemis Company, Inc. 1987 Stock Option Plan. * (1)
10(b) Bemis Company, Inc. 1994 Stock Incentive Plan. * (3)
10(c) Bemis Company, Inc. 1984 Stock Award Plan. * (4)
10(d) Bemis Retirement Plan, as amended effective January 1, 1994. * (4)
10(e) Bemis Company, Inc. Supplemental Retirement Plan dated
October 20, 1988. * (4)
10(f) Bemis Executive Incentive Plan dated April 1, 1990. * (4)
10(g) Bemis Company, Inc. Long Term Deferred Compensation Plan. * (4)
10(h) Amended and Restated Credit Agreement among Bemis Company, Inc., the
Banks Listed therein and Morgan Guaranty Trust Company of New York as
Agent, originally dated as of August 1, 1986, Amended and Restated as
of August 1, 1991, as amended by Amendment No. 1 dated as of May 1,
1992, as amended by Amendment No. 2 dated December 1, 1992, as amended
by Amendment No. 3 dated January 22, 1993, as amended by Amendment No.
4 dated March 15, 1994, as amended by Amendment No. 5 dated June 1,
1994; and as amended by Amendment No. 6 dated February 1, 1995. (4)
13 1995 Annual Report to Shareholders
22 Subsidiaries of the Registrant
27 Financial Data Schedule (EDGAR electronic filing only). Electronic
_____________
* Management contract, compensatory plan or arrangement filed pursuant
to Rule 601(b)(10)(iii)(A) of Regulation S-K under the Securities
Exchange Act of 1934.
(1) Incorporated by reference to the Registrant's Registration Statement
on Form S-8 (File No. 33-50560).
(2) Incorporated by reference to the Registrant's Registration Statement
on Form 8-A dated August 4, 1989 (File No. 0-1387).
(3) Incorporated by reference to the Registrant's Registration Statement
on Form S-8 (File No. 33-80666).
(4) Incorporated by reference to the Registrant's Annual Report on Form
10-K/A for the year ended December 31, 1994 (File No. 1-5277).
(5) Incorporated by reference to the Registrant's Current Report on Form
8-K dated June 30, 1995 (File No. 1-5277).
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<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY AND EQUIPMENT
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1995
----------------------------------------------------------------------------------------
Deductions
------------------------
Fully Translation
Balance at Additions at Cost Depreciated Adjustment Balance
-----------------
Beginning Business Retirements Assets Debit at Close
of Year Normal Acquisition or Sales Written Off (Credit) of Year
--------- ------ ----------- -------- ----------- -------- -------
Owned Property and Equipment
<S> <C> <C> <C> <C> <C> <C> <C>
Land and land improvements $ 11,257 $ 87 $ 216 $ 52 $ 113 $ 50 $ 11,445
Buildings 149,597 11,926 13,776 96 225 1,691 176,669
Leasehold improvements 1,879 186 84 11 1,992
Machinery and equipment 558,637 81,416 21,294 1,420 34,497 3,748 629,178
------- ------ ------ ----- ------ ----- -------
$ 721,370 $ 93,615 $ 35,286 $ 1,568 $ 34,919 $ 5,500 $ 819,284
------- ------ ------ ----- ------ ----- -------
------- ------ ------ ----- ------ ----- -------
Leasehold Property and Equipment
Buildings $ 1,064 $ 1,064 $ 0
Machinery and equipment 29 18 13 34
------- ------ ----- ------ -------
$ 1,093 $ 18 $ 1,064 $ 13 $ 34
------- ------ ----- ------ -------
------- ------ ----- ------ -------
</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, 1994
----------------------------------------------------------------------------------------
Deductions
------------------------
Fully Translation
Balance at Additions at Cost Depreciated Adjustment Balance
-----------------
Beginning Business Retirements Assets Debit at Close
of Year Normal Acquisition or Sales Written Off (Credit) of Year
--------- ------ ----------- -------- ----------- -------- -------
Owned Property and Equipment
<S> <C> <C> <C> <C> <C> <C> <C>
Land and land improvements $ 11,900 $ 99 $ 200 $ 749 $ 229 $ 36 $ 11,257
Buildings 142,783 8,400 1,074 2,424 2,080 1,844 149,597
Leasehold improvements 1,769 105 8 13 1,879
Machinery and equipment 515,854 84,460 12,114 14,316 42,729 3,254 558,637
------- ------ ------ ----- ------ ----- -------
$ 672,306 $ 93,064 $ 13,388 $ 17,497 $ 45,038 $ 5,147 $ 721,370
------- ------ ------ ----- ------ ----- -------
------- ------ ------ ----- ------ ----- -------
Leasehold Property and Equipment
Buildings $ 4,262 $ 3,198 $ 1,064
Machinery and equipment 63 34 29
------- ----- -------
$ 4,325 $ 3,232 $ 1,093
------- ----- -------
------- ----- -------
</TABLE>
- 17 -
<PAGE>
BEMIS COMPANY, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY AND EQUIPMENT
(in thousands of dollars)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993
--------------------------------------------------
Balance at Additions at Cost Deductions
----------------- ----------
Beginning Business Retirements
of Year Normal Acquisition or Sales
--------- ------ ----------- ---------
OWNED PROPERTY AND EQUIPMENT
<S> <C> <C> <C> <C>
Land and land improvements $ 11,815 $ 627 $ 393 $ 524
Buildings 140,877 5,706 4,382 5,894
Leasehold improvements 2,531 120 684
Machinery and equipment 504,530 54,276 26,266 36,111
------- ------ ------ ------
$ 659,753 $ 60,729 $ 31,041 $ 43,213
------- ------ ------ ------
------- ------ ------ ------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 4,262
Machinery and equipment 1,900
-------
$ 6,162
-------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993
--------------------------------------------------------
Deductions
---------- Other
Fully Changes Translation
Depreciated Debit Adjustment Balance
Assets (Credit) Debit at Close
Written Off (1) (Credit) of Year
----------- --------- -------- ----------
OWNED PROPERTY AND EQUIPMENT
<S> <C> <C> <C> <C>
Land and land improvements $ 351 $ (60) $ 11,900
Buildings 227 (2,061) 142,783
Leasehold improvements 184 (14) 1,769
Machinery and equipment 28,969 662 (4,800) 515,854
------ ------ ------- -------
$ 29,731 $ 662 $ (6,935) $ 672,306
------ ------ ------- -------
------ ------ ------- -------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 4,262
Machinery and equipment 757 (1,001) (79) 63
------ ------ ------- -------
$ 757 $ (1,001) $ (79) $ 4,325
------ ------ ------- -------
------ ------ ------- -------
</TABLE>
(1) Reclasifications.
- 18 -
<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY AND EQUIPMENT
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1995
----------------------------------------------------------------------------------------
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 $ 1,916 $ 227 $ 1 $ 113 $ (2) $ 2,031
Buildings 40,868 5,014 68 225 (700) (662) 46,951
Leasehold improvements 667 193 1 84 (6) 781
Machinery and equipment 217,445 51,505 769 34,497 700 (2,006) 234,990
------- ------ ------ ----- ------ ----- -------
$ 260,896 $ 56,939 $ 839 $ 34,919 $ 0 $ (2,676) $ 284,753
------- ------ ------ ----- ------ ----- -------
------- ------ ------ ----- ------ ----- -------
LEASED PROPERTY AND EQUIPMENT
Buildings $ 229 $ 229 $ 0
Machinery and equipment 22 $ 5 13 14
------- ------ ------ ----- -------
$ 251 $ 5 $ 229 $ 13 $ 14
------- ------ ------ ----- -------
------- ------ ------ ----- -------
</TABLE>
(1) Reclassifications.
- 19 -
<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY AND EQUIPMENT
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1994
----------------------------------------------------------------------------------------
Deductions
----------------------
Fully Translation
Balance at Charged to Depreciated Adjustment Balance
Beginning Profit Retirements Assets Debit at Close
OWNED PROPERTY AND EQUIPMENT of Year and Loss or Sales Written Off (Credit) of Year
---------- ---------- --------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Land improvements $ 2,100 $ 230 $ 181 $ 229 $ 4 $ 1,916
Buildings 38,911 4,524 521 2,080 (34) 40,868
Leasehold improvements 485 184 8 (6) 667
Machinery and equipment 218,784 45,864 6,639 42,729 (2,165) 217,445
------- ------ ------ ----- ------ -----
$ 260,280 $ 50,802 $ 7,349 $ 45,038 $ (2,201) $ 260,896
------- ------ ------ ----- ------ -----
------- ------ ------ ----- ------ -----
LEASED PROPERTY AND EQUIPMENT
Buildings $ 1,417 $ 98 $ 1,286 $ 229
Machinery and equipment 46 9 33 22
------- ------ ------ -----
$ 1,463 $ 107 $ 1,319 $ 251
------- ------ ------ -----
------- ------ ------ -----
</TABLE>
- 20 -
<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
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 $ 2,259 $ 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
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
</TABLE>
(1) Reclassifications.
- 21 -
<PAGE>
<TABLE>
<CAPTION>
BEMIS COMPANY, INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(in thousands of dollars)
YEAR ENDED DECEMBER 31, 1995
----------------------------------------------------------------------
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 $ 11,811 $ 714 $ 1,088(1) $ 11,437
---------- -------- ---------
---------- -------- ---------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
----------------------------------------------------------------------
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 $ 9,228 $ 4,059 $ 1,476(2) $ 11,811
---------- -------- --------- ----------
---------- -------- --------- ----------
</TABLE>
<TABLE>
<CAPTION>
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(3) $ 9,228
---------- -------- --------- ----------
---------- -------- --------- ----------
</TABLE>
(1) Net of $33 collections on accounts previously written off.
(2) Net of $103 collections on accounts previously written off.
(3) Net of $55 collections on accounts previously written off.
BEMIS COMPANY, INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(in thousands of dollars)
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Maintenance and repairs $46,623 $40,565 $37,565
------ ------ ------
------ ------ ------
</TABLE>
- 22 -
<PAGE>
FINANCIAL HIGHLIGHTS BEMIS COMPANY, INC.
(IN THOUSANDS, EXCEPT PERCENTS, RATIOS, PER AND SUBSIDIARIES
SHARE AMOUNTS, STOCKHOLDERS, AND EMPLOYEES)
<TABLE>
<CAPTION>
%
1995 1994 CHANGE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SALES AND EARNINGS:
Net Sales. . . . . . . . . . . . . . . . . $1,523,390 $1,390,459 10%
Income Before Taxes. . . . . . . . . . . . 136,110 118,094 15
Income Taxes . . . . . . . . . . . . . . . 50,900 45,300
Net Income . . . . . . . . . . . . . . . . 85,210 72,794 17
- --------------------------------------------------------------------------------------------------
PER SHARE:
Net Income . . . . . . . . . . . . . . . . $1.63 $1.40 16%
Dividends Paid . . . . . . . . . . . . . .. .64 .54 19
Book Value . . . . . . . . . . . . . . . . 9.76 8.16 20
- --------------------------------------------------------------------------------------------------
RATIOS:
Net Income to Net Sales. . . . . . . . . . 5.6% 5.2%
Return on Average Common Equity. . . . . . 18.3% 18.5%
Return on Average Total Capital. . . . . . 13.5% 13.4%
Total Debt to Total Capital. . . . . . . . 23.3% 27.5%
Current Ratio. . . . . . . . . . . . . . . 2.0 2.0
- --------------------------------------------------------------------------------------------------
ADDITIONAL INFORMATION:
Cash Flow Provided by Operations . . . . . $ 155,480 $ 132,508 17%
Capital Expenditures . . . . . . . . . . . 93,615 93,064 1
Stock PE Range . . . . . . . . . . . . . . 14-18 15-18
Average Common Shares Outstanding
for Computation of EPS. . . . . . . . . . 52,311 51,953 1
Common Shares Outstanding at Year-End. . . 52,567 51,211 3
Number of Common Stockholders. . . . . . . 5,711 5,602 2
Number of Employees. . . . . . . . . . . . 8,515 8,120 5
</TABLE>
1
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
SUMMARY
The primary focus of 1995 continued to be increased investment in the
Company's core businesses to insure future growth. Capital expenditures for the
year totaled $94 million, compared to $93 million in 1994 and $61 million in
1993. Most of the 1995 capital program was dedicated to improving our
manufacturing and technical capabilities in the Flexible Packaging Products
segment. An additional significant investment was made in October of 1995 with
the acquisition of Banner Packaging, Inc. This $60 million sales company
complements existing film business by providing key customers, additional
products and technology, and high quality, polyethylene packaging material
manufacturing capability.
Continuing the strategic focus on the Company's core businesses, a
preliminary agreement was announced in November to sell the two divisions of
Hayssen Manufacturing Company, a principal packaging machinery business with
total annual sales volume of $100 million. The first portion of the sale,
representing $30 million in annual sales, was completed in January of 1996. Sale
of the second division is expected to be completed in the second quarter of
1996.
During the second quarter of 1995, we completed the $21 million
restructuring program announced in the third quarter of 1993. Final program
results included $15.3 million in non-cash and $5.6 million in cash expenses.
Overall results for the year produced sales of $1.52 billion, up 10 percent
over 1994 and 27 percent over 1993. Net Income for the same period totaled $85.2
million, up 17 percent over 1994 and 44 percent over 1993's results prior to
reductions in net income for unusual charges in the year related to
restructuring and FAS 112. Earnings per share for the same comparative period
were $1.63 for 1995, $1.40 for 1994, and $1.14 in 1993 prior to a $.25 charge
related to restructuring and a $.03 charge related to the adoption of FAS 112.
<TABLE>
<CAPTION>
THREE-YEAR REVIEW
PERCENT
-------------------------
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . . 100.0% 100.0% 100.0%
Cost of products sold. . . . . . . . . . 77.7 77.5 77.0
----- ----- -----
Gross margin . . . . . . . . . . . . . . 22.3 22.5 23.0
Selling, general and
administrative expenses . . . . . . . 11.7 12.3 13.4
All other expenses . . . . . . . . . . . 1.7 1.7 3.4
----- ----- -----
Income before income taxes . . . . . . . 8.9 8.5 6.2
Income taxes . . . . . . . . . . . . . . 3.3 3.3 2.4
----- ----- -----
Income before effect of
changes in accounting
principles. . . . . . . . . . . . . . 5.6 5.2 3.8
Cumulative effect on prior
years of adoption of
FAS 112 in 1993 . . . . . . . . . . . (0.1)
----- ----- -----
Net income . . . . . . . . . . . . . . . 5.6% 5.2% 3.7%
Effective tax rate . . . . . . . . . . . 37.4% 38.4% 38.0%
</TABLE>
Sales for both segments, Flexible Packaging and Specialty Coated and
Graphics Products, reflected increases over the prior year's results in both
1995 and 1994. These increases came despite some unusual circumstances. In
Flexible Packaging, inventory corrections were a constant problem throughout the
last nine months of 1995, while 1994 presented its own unique pricing challenges
versus 1993, prompted by the largest annual increase in raw material costs in
recent history. Some of the same difficulties affected Specialty Coated and
Graphics Products. In 1995, sales were tempered by rising prices for paper based
products and weakening demand in the latter part of the year related to
inventory adjustments in the U.S. market and a slower economy in Europe. Despite
these problems, 1995 sales totaled $433.6 million, up 5 percent over 1994 and 45
percent over 1993 when European business was very slow.
From an Operating Profit standpoint, both product segments reflected higher
earnings as well as an improved return on sales. Flexible Packaging recorded
Operating Profits of $123.0 million for 1995 or 11.3 percent on sales versus
1994 results of $107.6 million or 11.0 percent on sales; in 1993, Operating
Profits were $73.7 million or 8.1 percent on sales. In the Specialty Coated and
Graphics Products segment, 1995 Operating Profits totaled $46.6 million in 1995,
$43.7 million in 1994, and $28.4 million in 1993 with a return on sales of 10.7
percent, 10.6 percent, and 9.5 percent, respectively. The 1994 Operating Profit
was up due to the rebound of the European pressure-sensitive business, after a
difficult 1993 and the acquisition of Fitchburg Coated Products in early 1994.
FORWARD LOOK
We continue to be enthusiastic about the future. It appears at this time
that 1996 will reflect a less volatile raw material pricing climate, resulting
in a more normal growth in unit volume. We continue to make good progress toward
increasing our business with key customers; our business mix has taken a
favorable turn toward higher margin products; and we have some promising new
products on the horizon.
RESTRUCTURING
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), and the
consolidation of two paper packaging plants into larger facilities ($5.0
million). These restructuring actions were expected to result in the elimination
of 264 jobs in the U.S. and Europe and the relocation of an additional 27
employees in conjunction with the closing of five manufacturing facilities.
Actual employee reductions for this project totaled 266 plus 26 transfers.
20
<PAGE>
The total 1993 charge of $21 million included $13.6 million for asset
write-downs/redeployment, $4.1 million for employee severance and relocation,
and $3.3 million for all other expenses. As of June 30, 1995, the close of this
project, actual charges against the reserve totaled $20.9 million, and for the
same comparable categories were $12.2 million, $4.1 million, and $4.6 million,
respectively. Of this $20.9 million in total net charges, $15.3 million was for
non-cash write-offs and $5.6 million represents cash outlays net of recoveries
on asset disposals. The remaining $.1 million was restored to income in June of
1995. All of the closed facilities have been sold. The remaining minor sublease
and severance payments are contractual in nature and have been fully accrued.
COSTS AND EXPENSES
Costs of Goods Sold as a percentage of Net Sales increased slightly for the
three year period. Sharp raw material price increases experienced in 1994 were
partially reversed in 1995. However, this benefit was more than offset by
competitive pricing pressures and higher manufacturing overhead in 1995
resulting in a slight increase in overall Cost of Sales.
Selling, General and Administrative Expense increased in absolute dollars
in 1995 and 1994 but declined as a percent of sales due to business
acquisitions, improving European business conditions, and advantages achieved
through higher sales volume. Actual expense for 1995 increased $6.8 million or 4
percent compared to 1994, and $9.5 million or 5.9 percent for 1994 versus 1993.
Research and Development Expense was $13.6 million in 1995, $13.1 million
in 1994, and $14.1 million in 1993. While 1995 expense was up $.5 million over
1994, it remained at .9 percent of sales. Expenses in 1994 declined in absolute
dollars and as a percent of sales versus 1993 due to reduced product development
expense in our packaging machinery business.
Interest Expense was $11.5 million for 1995, compared to $8.4 million in
1994 and $7.2 million in 1993. Higher average interest rates and debt levels for
the three-year period account for the higher interest expense. The increased
debt level was due to higher working capital to support rising business activity
and added inventory to combat raw materials price increases. Higher rates during
the period were due to a combination of market factors and the transfer of $100
million of Commercial Paper to 6.7 percent Notes due in 2005.
Other Costs (Income), excluding the $21 million restructuring charge in
September of 1993, reflect income of $3.1 million for 1995 versus $.8 million in
1994 and $3.3 million in 1993. The lower income for 1994 compared to 1995 and
1993 relates primarily to differences in exchange losses on foreign currency
transactions of $1.2 million in 1994 versus $.1 million in 1995 and $.2 million
in 1993; gains on business and product line sales in 1993 not present in 1994;
and income in 1995 related to a minority equity investment, the balance of which
was acquired in the fourth quarter of 1995, which has no counterpart in 1993.
RETURN ON INVESTMENT
Return on average common stockholders' equity in 1995 was 18.3 percent
compared to 18.5 percent in 1994 and 12.1 percent in 1993. The sharp decline for
1993 versus 1995 and 1994 is due primarily to the $21 million restructuring
charge in 1993, as previously explained.
Operating Profit as a percent of average investment, which appears in the
Five-Year Summary on page five of this report, was 21.4 percent in 1995,
compared to 22.9 percent in 1994 and 16.9 percent in 1993.
The return in Flexible Packaging was 20.1 percent in 1995 compared to 21.8
percent in 1994, and 16.2 percent in 1993. The return in Specialty Coated and
Graphics Products was 25.7 percent in 1995 compared to 26.1 percent in 1994 and
18.9 percent in 1993.
Return on average total capital was 13.5 percent in 1995, 13.4 percent in
1994, and 9.2 percent in 1993. 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 1995 were $93.6 million compared to $93.1 million
in 1994 and $60.7 million in 1993, including capitalized interest of $.7
million, $.7 million, and $.5 million for 1995, 1994, and 1993, respectively. In
1996, management anticipates expenditures to exceed $100 million. The bulk of
these expenditures, made from internally generated funds, 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 and
a major plant expansion for our European pressure-sensitive business.
CAPITAL STRUCTURE, LIQUIDITY, AND CASH FLOW
Stockholders' equity increased in 1995 to $512.8 million, up from $418.0
million in 1994 and $370.5 million in 1993, due primarily to earnings net of
dividend payments and the issuance of common stock for the acquisition of Banner
Packaging, Inc. In 1995, $8.4 million of common stock was repurchased compared
to none in 1994 and $1.3 million in 1993.
Total debt decreased $3.2 million in 1995 to $170.9 million, making debt as
a percent of stockholders' equity 33 percent compared to 42 percent in 1994 and
34 percent in 1993. In 1996 total debt is expected to decrease $30 - $40 million
due to expected gains from the sale of a subsidiary partially offset by
increases in capital expenditures and working capital.
Working capital (excluding short-term debt) increased by $17.0 million to
$227.5 million in 1995 following an increase of $53.6 million to $210.5 million
in 1994, and a decrease of $4.6 million to $156.9 million in 1993. The 1995
increase resulted from higher business activity and more aggressive raw material
purchases made in advance of announced vendor price increases. The current ratio
was 2.0:1 in 1995 and 1994 compared to 1.8:1 in 1993.
The Company's cash flow remained strong in 1995 as cash provided by
operations was $155.5 million compared to $132.5 million in 1994 and $97.5
million in 1993. Cash provided by operations was reduced in 1993 by charges
against income of $15.9 million for restructuring and adoption of FAS 112. The
following schedule presents the major sources and uses of cash for the Company
in 1995.
CONTINUED
21
<PAGE>
MANAGEMENT'S DISCUSSION continued
<TABLE>
<CAPTION>
SOURCES AND USES OF CASH (IN MILLIONS OF DOLLARS)
<S> <C>
SOURCES: Net income . . . . . . . . . . . . $ 85.2
Depreciation and amortization. . . 58.0
Minority interest. . . . . . . . . 3.8
Deferred income taxes. . . . . . . 8.7
------
Total Sources. . . . . . . . . $155.7
------
------
USES: Capital expenditures . . . . . . . $ 93.6
Increase in working capital(*) . . 17.0
Decrease in total debt . . . . . . 3.2
Common stock repurchases . . . . . 8.4
Dividends. . . . . . . . . . . . . 33.2
Other. . . . . . . . . . . . . . . 0.3
------
Total Uses. . . . . . . . . . . $155.7
------
------
</TABLE>
(*)Excluding short-term debt.
The Company's pretax interest coverage was 13 times in 1995 compared to 15
times in 1994 and 11 times in 1993. Pretax income increased to $136.1 million in
1995 from $118.1 million in 1994 and $74.4 million in 1993. Interest expense was
$11.5 million in 1995, $8.4 million in 1994, and $7.2 million in 1993.
Following are pretax interest coverage ratios for the last five years:
PRETAX INTEREST COVERAGE
Coverage of Interest by Pretax Income and Interest
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
8.0 13.0 11.3 15.1 12.8
- ---------------------------------------------------------------
</TABLE>
Substantial credit is available to the Company for future use, including a
$100 million revolving credit agreement with five banks. Bemis is also an issuer
of commercial paper which carries an A1/P1 rating.
FOREIGN CURRENCY EXPOSURES
The Company enters into forward foreign currency exchange contracts to
hedge certain foreign currency denominated receivables and payables, principally
at our operations in Belgium, France, Germany, Italy, England, Sweden, and
Spain. Exchange gains and losses arising from these transactions are deferred
and recognized when the transaction for which the hedge was obtained is
finalized. At December 31, 1995 and 1994, the Company had outstanding forward
foreign currency exchange contracts aggregating $17,377,000 and $16,127,000,
respectively. Forward foreign currency exchange contracts generally have
maturities of less than nine months and relate primarily to major Western
currencies. Counterparties to the forward foreign currency exchange contracts
are major financial institutions. Credit loss from counterparty nonperformance
is not anticipated. Based on quoted year-end market prices of forward foreign
currency exchange contracts the Company would have experienced a $559,000 loss
at December 31, 1995, and a $52,000 loss at December 31, 1994, had outstanding
contracts been settled at those respective dates.
INCOME TAXES
Our effective tax rate was 37 percent in 1995 versus 38 percent in 1994 and
1993. The primary difference between our overall tax rate and the U.S. statutory
tax rate of 35 percent in 1995, 1994, and 1993 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). The Financial Accounting Standards Board
(FASB) issued FAS 123, Accounting for Stock-Based Compensation, in October 1995.
Currently, the Company follows the requirements of Accounting Principles Board
(APB) Opinion 25 issued in October 1972. FAS 123 requires adoption in 1996 and
provides an option of continuing the provisions of APB 25 with footnoted pro
forma disclosure of the net income and earnings per share impact of FAS 123. The
Company is currently evaluating the provisions of FAS 123.
MARKET PRICES(*) AND DIVIDENDS
The Bemis quarterly dividend was increased by 18.5 percent in the first
quarter of 1995 to 16 cents per share from 13.5 cents. This followed first
quarter increases of 8 percent in 1994 to 13.5 cents per share from 12.5 cents,
and 9 percent in 1993 to 12.5 cents per share from 11.5 cents.
Common dividends for the year were 64 cents per share, up from 54 cents in
1994 and 50 cents in 1993. The 1995 dividend payout ratio was 39 percent
compared to 39 percent in 1994 and 58 percent in 1993. Based on the market price
of $24 per share at the beginning of 1995, the dividend yield was 2.7 percent.
Stockholders' equity per common share (book value per share) increased to
$9.76 per share in 1995, up from $8.16 per share in 1994 and $7.24 per share in
1993. Trading volume in Bemis common stock was 18.9 million shares in 1995.
In February 1996, the Board of Directors increased the quarterly cash
dividend on common stock to 18 cents per share from 16 cents, a 12.5 percent
increase.
<TABLE>
<CAPTION>
BEMIS COMMON STOCK 1995 1994 1993
------------------------------------------------------------------------------------------------------
PERFORMANCE High Low Div. Paid High Low Div. Paid High Low Div. Paid
--------------------------------- ---------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter. . . . . 29-1/2 23-3/8 $.16 24-1/8 21-1/8 $.135 26-3/4 24 $.125
Second Quarter . . . . 29-3/8 26 .16 24-7/8 21 .135 24-7/8 21-1/4 .125
Third Quarter. . . . . 29-3/4 26 .16 25-5/8 22-1/2 .135 23-1/8 20-1/4 .125
Fourth Quarter . . . . 27-3/4 24-7/8 .16 25 21-7/8 .135 23-5/8 20-1/4 .125
</TABLE>
(*)New York Stock Exchange: BMS
22
<PAGE>
FIVE-YEAR CONSOLIDATED REVIEW BEMIS COMPANY, INC.
(IN MILLIONS, EXCEPT PERCENTS, SHARES, RATIOS, AND SUBSIDIARIES
PER SHARE AMOUNTS, STOCKHOLDERS, AND EMPLOYEES)
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Net sales. . . . . . . . . . . . . . . . . . . . . . . $1,523.4 $1,390.5 $1,203.5 $1,181.3 $1,141.6
Cost of products sold and other expenses . . . . . . . 1,375.8 1,264.0 1,121.9 1,083.5 1,044.6
Interest expense . . . . . . . . . . . . . . . . . . . 11.5 8.4 7.2 7.5 12.1
Income before income taxes . . . . . . . . . . . . . . 136.1 118.1 74.4 90.3 84.9
Income taxes . . . . . . . . . . . . . . . . . . . . . 50.9 45.3 28.3 33.0 31.9
Income before effect of changes in
accounting principles. . . . . . . . . . . . . . . 85.2 72.8 46.1 57.3 53.0
Cumulative effect on prior years of adoption
of FAS 112 in 1993 and FAS 106 and
FAS 109 in 1992. . . . . . . . . . . . . . . . . . (1.8) (0.3)
Net income . . . . . . . . . . . . . . . . . . . . . . 85.2 72.8 44.3 57.0 53.0
Net income as a percentage of net sales. . . . . . . . 5.6% 5.2% 3.7% 4.8% 4.6%
COMMON SHARE DATA
Income before effect of changes in
accounting principles. . . . . . . . . . . . . . . 1.63 1.40 .89 1.11 1.03
Cumulative effect of adoption of FAS 112 in
1993 and FAS 106 and FAS 109 in 1992 . . . . . . . (.03) (.01)
Net income . . . . . . . . . . . . . . . . . . . . . . 1.63 1.40 .86 1.10 1.03
Dividends per common share . . . . . . . . . . . . . . .64 .54 .50 .46 .42
Book value per common share. . . . . . . . . . . . . . 9.76 8.16 7.24 7.06 6.46
Stock PE ratio range . . . . . . . . . . . . . . . . . 14-18 15-18 24-31 18-27 13-20
Average common shares and common share
equivalents outstanding during the year for
computation of earnings per share. . . . . . . . . 52,311,421 51,953,210 51,767,064 51,839,696 51,529,806
Common shares outstanding at year-end. . . . . . . . . 52,567,349 51,211,326 51,201,326 51,151,770 50,986,128
CAPITAL STRUCTURE AND OTHER DATA
Current ratio. . . . . . . . . . . . . . . . . . . . . 2.0 2.0 1.8 2.0 1.8
Working capital. . . . . . . . . . . . . . . . . . . . 223.1 208.1 152.8 154.0 140.6
Total assets . . . . . . . . . . . . . . . . . . . . . 1,030.6 923.3 789.8 742.7 714.9
Long-term debt . . . . . . . . . . . . . . . . . . . . 166.4 170.7 120.5 127.8 125.2
Long-term obligations under capital leases . . . . . . -- 1.0 2.7 3.2 3.6
Stockholders' equity . . . . . . . . . . . . . . . . . 512.8 418.0 370.5 361.0 329.2
Return on average common equity. . . . . . . . . . . . 18.3% 18.5% 12.1% 16.5% 17.0%
Return on average total capital. . . . . . . . . . . . 13.5% 13.4% 9.2% 11.8% 11.8%
Depreciation and amortization. . . . . . . . . . . . . 58.0 51.8 47.0 48.3 47.1
Capital expenditures . . . . . . . . . . . . . . . . . 93.6 93.1 60.7 70.7 56.9
Number of common stockholders. . . . . . . . . . . . . 5,711 5,602 5,649 5,020 4,411
Number of employees. . . . . . . . . . . . . . . . . . 8,515 8,120 7,565 7,733 7,796
Wages and salaries . . . . . . . . . . . . . . . . . . 287.0 276.8 251.6 246.3 234.5
Research and development expense . . . . . . . . . . . 13.6 13.1 14.1 15.9 13.2
</TABLE>
23
<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 LLP, 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 Price Waterhouse LLP 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.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ John H. Roe /s/ Benjamin R. Field, III /s/ Leroy F. Bazany
JOHN H. ROE BENJAMIN R. FIELD, III LEROY F. BAZANY
PRESIDENT AND SENIOR VICE PRESIDENT, VICE PRESIDENT AND CONTROLLER
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER AND TREASURER
</TABLE>
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, 1995 and 1994,
and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, 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 LLP
PRICE WATERHOUSE LLP
MINNEAPOLIS, MINNESOTA, JANUARY 22, 1996
24
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
YEARS ENDED DECEMBER 31,
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994 1993
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . $1,523,390 $1,390,459 $1,203,494
Costs and expenses:
Cost of products sold. . . . . . . . . . . . 1,183,514 1,077,130 926,135
Selling, general and
administrative expenses. . . . . . . . . . . 177,971 171,139 161,598
Research and development . . . . . . . . . . 13,603 13,124 14,084
Interest . . . . . . . . . . . . . . . . . . 11,549 8,395 7,201
Other (income) costs, net. . . . . . . . . . (3,138) (802) 17,739
Minority interest in net income. . . . . . . 3,781 3,379 2,360
--------- --------- ----------
Income before income taxes . . . . . . . . . . 136,110 118,094 74,377
Provision for income taxes . . . . . . . . . . 50,900 45,300 28,300
--------- --------- ----------
Income before effect of changes
in accounting principles . . . . . . . . . . 85,210 72,794 46,077
Cumulative effect on prior years
of adoption of FAS 112 in 1993 . . . . . . . (1,746)
--------- --------- ----------
Net income . . . . . . . . . . . . . . . . . . $ 85,210 $ 72,794 $ 44,331
--------- --------- ----------
--------- --------- ----------
Earnings per share of common stock
before effect of changes in
accounting principles. . . . . . . . . . . . $1.63 $1.40 $.89
Cumulative effect of adoption
of FAS 112 in 1993 . . . . . . . . . . . . . (.03)
--------- --------- ----------
Earnings per share of common stock . . . . . . $1.63 $1.40 $.86
--------- --------- ----------
--------- --------- ----------
</TABLE>
(SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.)
25
<PAGE>
CONSOLIDATED BALANCE SHEET
DECEMBER 31,
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
ASSETS 1995 1994
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash. . . . . . . . . . . . . . . . . . . . . . $ 22,032 $ 12,726
Accounts receivable, less $11,437 and $11,811
for doubtful accounts and allowances. . . . . . 201,725 197,164
Inventories . . . . . . . . . . . . . . . . . . 178,085 168,153
Prepaid expenses and deferred charges . . . . . 40,432 40,829
----------- ----------
Total current assets . . . . . . . . . . . . 442,274 418,872
----------- ----------
Property and equipment:
Land and land improvements. . . . . . . . . . . 11,445 11,257
Buildings and leasehold improvements. . . . . . 178,661 152,540
Machinery and equipment . . . . . . . . . . . . 629,212 558,666
----------- ----------
819,318 722,463
Less--accumulated depreciation. . . . . . . . . 284,767 261,147
----------- ----------
534,551 461,316
----------- ----------
Excess of cost of investments in subsidiaries
over net assets acquired. . . . . . . . . . . . 42,437 29,743
Other assets . . . . . . . . . . . . . . . . . . . 11,333 13,408
----------- ----------
53,770 43,151
----------- ----------
Total assets. . . . . . . . . . . . . . . . . . $1,030,595 $923,339
----------- ----------
----------- ----------
</TABLE>
CONTINUED
(SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.)
26
<PAGE>
BEMIS COMPANY, INC.
AND SUBSIDIARIES
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt. . . . . . . . $ 3,405 $ 753
Short-term borrowings. . . . . . . . . . . . . . 1,080 1,671
Accounts payable . . . . . . . . . . . . . . . . 163,692 159,272
Accrued liabilities:
Salaries and wages . . . . . . . . . . . . . . 29,128 31,956
Income taxes . . . . . . . . . . . . . . . . . 13,455 9,495
Other taxes. . . . . . . . . . . . . . . . . . 8,455 7,671
----------- -----------
Total current liabilities . . . . . . . . . 219,215 210,818
Long-term debt, less current portion . . . . . . . 166,435 171,728
Deferred taxes . . . . . . . . . . . . . . . . . . 49,758 40,013
Other liabilities and deferred credits . . . . . . 53,943 58,823
----------- ----------
Total liabilities. . . . . . . . . . . . . . . 489,351 481,382
----------- ----------
Minority interest. . . . . . . . . . . . . . . . . 28,436 23,930
Commitments and contingencies
Stockholders' equity:
Common stock, $.10 par value:
Authorized--123,800,000 shares
Issued--57,811,966 and 55,723,731 shares. . . 5,781 5,572
Capital in excess of par value . . . . . . . . . 147,119 101,290
Retained income. . . . . . . . . . . . . . . . . 496,252 439,364
Cumulative translation adjustment. . . . . . . . 10,505 5,294
Common stock held in treasury,
5,244,617 and 4,512,405 shares, at cost. . . . (146,849) (133,493)
----------- ----------
Total stockholders' equity . . . . . . . . . . 512,808 418,027
----------- ----------
Total liabilities and stockholders' equity . . . . $1,030,595 $ 923,339
----------- ----------
----------- ----------
</TABLE>
27
<PAGE>
CONSOLIDATED STATEMENT
OF CASH FLOWS
YEARS ENDED DECEMBER 31,
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . $ 85,210 $ 72,794 $ 44,331
Non-cash items:
Depreciation and amortization . . . . . . . . . . . . 57,954 51,828 46,982
Minority interest in net income . . . . . . . . . . . 3,781 3,379 2,360
Deferred income taxes, non-current portion. . . . . . 8,746 4,297 2,582
(Gain) loss on sale of property and equipment . . . . (211) 210 1,231
--------- --------- ---------
Cash provided by operations . . . . . . . . . . . . . . . 155,480 132,508 97,486
Changes in working capital, net of
effects of acquisitions and dispositions:
Accounts receivable . . . . . . . . . . . . . . . . . 3,868 (20,863) (3,188)
Inventories . . . . . . . . . . . . . . . . . . . . . (7,287) (23,784) (654)
Prepaid expenses and deferred charges . . . . . . . . 1,019 (768) (19,589)
Accounts payable. . . . . . . . . . . . . . . . . . . (1,187) 11,881 19,038
Accrued salaries and wages. . . . . . . . . . . . . . (3,048) 7,530 (1,110)
Accrued income taxes. . . . . . . . . . . . . . . . . 4,254 (759) 1,586
Accrued other taxes . . . . . . . . . . . . . . . . . 304 (2,501) 3,798
Changes in other liabilities and deferred credits . . . . (1,077) 523 18,284
Changes in deferred charges and other investments . . . . (1,389) (230) (742)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . (1,158) 1,280 (1,005)
--------- --------- ---------
Net cash provided by operating activities. . . . . . . . . . $149,779 $104,817 $113,904
--------- --------- ---------
</TABLE>
CONTINUED
28
<PAGE>
BEMIS COMPANY, INC.
AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONTINUED 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from investing activities:
Additions to property and equipment. . . . . . . . ($93,615) ($93,064) ($60,729)
Business acquisition . . . . . . . . . . . . . . . (552) (31,956) (32,749)
Business divestitures. . . . . . . . . . . . . . . 25,065
Proceeds from sale of property and equipment . . . 2,135 3,594 2,491
Other. . . . . . . . . . . . . . . . . . . . . . . 3 337 111
-------- -------- --------
Net cash used by investing activities. . . . . . . . . (92,029) (121,089) (65,811)
-------- -------- --------
Cash flows from financing activities:
Increase in long-term debt . . . . . . . . . . . . 579 57,601 4,791
Repayment of long-term debt. . . . . . . . . . . . (11,166) (10,287) (11,426)
Change in short-term borrowings. . . . . . . . . . (591) 1,671 (1,131)
Change in current portion of long-term debt. . . . (748) (3,769) (1,701)
Cash dividends paid. . . . . . . . . . . . . . . . (33,175) (27,654) (25,586)
Subsidiary dividends to minority stockholders. . . (1,703) (3,406)
Purchase of common stock for the treasury . . . . (8,395) (1,262)
Stock incentive programs and related tax effects . 3,449 138 1,642
-------- -------- --------
Net cash (used) provided by financing activities . . . (50,047) 15,997 (38,079)
-------- -------- --------
Effect of exchange rate changes on cash. . . . . . . . 1,603 4,090 (1,204)
-------- -------- --------
Net increase in cash . . . . . . . . . . . . . . . . . $ 9,306 $ 3,815 $ 8,810
-------- -------- --------
-------- -------- --------
Supplemental non-cash investing and financing activities:
Fair value of assets acquired. . . . . . . . . . . $64,646
Liabilities assumed. . . . . . . . . . . . . . . . 21,505
--------
Net value acquired . . . . . . . . . . . . . . . . 43,141
Common stock issued. . . . . . . . . . . . . . . . 42,589
--------
Cash used for acquisition. . . . . . . . . . . . . $ 552
--------
--------
</TABLE>
During the three years ended December 31, 1995, 1994, and 1993, the Company paid
interest of $8,268, $9,223, and $7,633, and income taxes of $39,296, $39,918,
and $34,872, respectively.
(SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.)
29
<PAGE>
CONSOLIDATED STATEMENT BEMIS COMPANY, INC.
OF STOCKHOLDERS EQUITY AND SUBSIDIARIES
(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, 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)
------ -------- -------- ------- ---------
Net income for 1994. . . . . . . . . . . . . 72,794
Translation adjustment for 1994. . . . . . . 5,908
Pension liability adjustment . . . . . . . . (3,698)
Cash dividends paid on common stock,
$.54 per share . . . . . . . . . . . . . . (27,654)
Stock incentive programs and
related tax effects. . . . . . . . . . . . 1 137
------ -------- -------- ------- ---------
Balance at December 31, 1994 . . . . . . . . $5,572 $101,290 $439,364 $5,294 ($133,493)
------ -------- -------- ------- ---------
Net income for 1995. . . . . . . . . . . . . 85,210
Translation adjustment for 1995. . . . . . . 5,211
Pension liability adjustment . . . . . . . . 4,853
Cash dividends paid on common stock,
$.64 per share . . . . . . . . . . . . . . (33,175)
Stock incentive programs and
related tax effects. . . . . . . . . . . . 28 3,421
Common stock transactions
related to an acquisition of a
subsidiary company . . . . . . . . . . . . 181 42,408 (4,961)
Purchase of 330,300 shares
of common stock. . . . . . . . . . . . . . (8,395)
------ -------- -------- ------- ---------
Balance at December 31, 1995 . . . . . . . . $5,781 $147,119 $496,252 $10,505 ($146,849)
------ -------- -------- ------- ---------
------ -------- -------- ------- ----------
</TABLE>
(SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.)
30
<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. The recoverability of unamortized goodwill is assessed on an ongoing
basis by comparing undiscounted cash flows from operations to net book value.
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. 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
outstanding 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 outstanding 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, 1995, none of these shares were issued or outstanding.
ENVIRONMENTAL COST: The Company is involved in a number of environmental related
disputes and claims. The Company accrues for environmental costs when it is
probable that these costs will be incurred and can be reasonably estimated. In
addition, costs which can not be reasonably estimated, are directly expensed
when payment is made. At December 31, 1995 and 1994, reserves were $745,000 and
$1,148,000, respectively. Adjustments to the reserve accounts and costs which
were directly expensed for environmental remediation matters resulted in charges
to the income statements for 1995, 1994, and 1993 of $164,000, $991,000, and
$729,000, net of third party reimbursements totaling $335,000, $336,000, and
$1,392,000 for 1995, 1994, and 1993, respectively. The Company is not aware of
any pending or threatened litigation that is likely to have a material adverse
effect on the business, operating results, or financial condition.
ESTIMATES AND ASSUMPTIONS REQUIRED: The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
31
<PAGE>
- -------------------------------------------------------------------------------
NOTE 2 -- CHANGES IN ACCOUNTING PRINCIPLES
The Company adopted Financial Accounting Standards related to
postemployment benefits (Statement 112) during 1993. Accordingly, the cumulative
effect of this change in accounting principles has been reported in the
Consolidated Statement of Income as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS, EXCEPT EPS) 1993
- -------------------------------------------------------------------------
<S> <C>
Statement 112, Postemployment Benefits:
Cumulative effect on prior years . . . . . . . . . . $(2,798)
Income tax benefit upon
adoption of FAS 112. . . . . . . . . . . . . . . . . 1,052
--------
Cumulative net effect on prior years of
adoption of FAS 112. . . . . . . . . . . . . . . . . $(1,746)
--------
--------
Effect on EPS of
adoption of FAS 112. . . . . . . . . . . . . . . . . $ (.03)
--------
--------
</TABLE>
- -------------------------------------------------------------------------------
NOTE 3 -- BUSINESS ACQUISITIONS AND DISPOSITIONS
On October 5, 1995, the Company acquired Banner Packaging, Inc., for Bemis
common stock valued at $42.6 million and $.5 million in cash. Banner, with total
annual sales of approximately $60 million, operates a large manufacturing
facility in Oshkosh, Wisconsin, producing coextruded films, flexographic
printing, and bag conversion. The total purchase price of $43.1 million has been
accounted for under the purchase method of accounting, and results of operations
for Banner subsequent to October 4, 1995, are included in these financial
statements.
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 which
totaled approximately $17 million in annual sales. The combined net purchase
price of $32 million has been accounted for under the purchase method of
accounting. The results of operations for Fitchburg subsequent to January 2,
1994, and for Hargro subsequent to January 19, 1994, are included in these
financial statements.
On February 4, 1993, the Company acquired the Princeton Packaging Bakery
Division, with sales of approximately $70 million, 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 3, 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. Combined 1992 sales for these two operations
totaled nearly $59 million. Cash received for these two operations totaled $25
million. The nominal gain realized on these transactions is included in other
income.
Supplemental pro forma results of operations giving effect to the
acquisitions and dispositions are not presented because they are not material.
- -------------------------------------------------------------------------------
NOTE 4 -- RESTRUCTURING OF OPERATIONS
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.
These restructuring actions were expected to result in the elimination of 264
jobs in the U.S. and Europe and the relocation of an additional 27 employees in
conjunction with the closing of five manufacturing facilities. At the close of
the project, actual employee reductions totaled 266 plus 26 transfers.
<TABLE>
<CAPTION>
EMPLOYEE SEPARATIONS -- RESTRUCTURING
HOURLY SALARIED TOTAL
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Planned Employee Reductions. . . . . . . . . . . 187 77 264
----- ---- ----
ACTUAL EMPLOYEE REDUCTIONS
1993 -- Packaging Machinery. . . . . . . . . . . 38 14 52
Paper Packaging. . . . . . . . . . . . . 4 4
Coated and Laminated Film. . . . . . . . 29 4 33
----- ---- ----
Total. . . . . . . . . . . . . . . 71 18 89
----- ---- ----
1994 -- Packaging Machinery. . . . . . . . . . . 34 37 71
Paper Packaging. . . . . . . . . . . . . 77 18 95
Coated and Laminated Film. . . . . . . . 5 6 11
----- ---- ----
Total . . . . . . . . . . . . . . . 116 61 177
----- ---- ----
1995 -- None
Cumulative Total . . . . . . . . . . . . 187 79 266
----- ---- ----
----- ---- ----
</TABLE>
CONTINUED
32
<PAGE>
- --------------------------------------------------------------------------------
NOTE 4 -- RESTRUCTURING continued
All facility closures and consolidations were essentially completed as of
the end of 1994 with the balance completed by mid-1995. Of the $21 million
estimated restructuring expense, actual cash cost was $5.6 million and total
non-cash cost was 15.3 million. The remaining $.1 million reserve was
restored to income in 1995, since the project was completed.
<TABLE>
<CAPTION>
ANALYSIS OF RESTRUCTURING RESERVE ASSET
EMPLOYEE WRITE-DOWNS/
(IN THOUSANDS OF DOLLARS) COSTS REDEPLOYMENT OTHER TOTAL CASH NON-CASH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Reserve balance September 30, 1993 . . . . . . . . . . $(4,100) $(13,600) $(3,300) $(21,000) $(9,600) $(11,400)
1993 RESERVE CHARGES: Packaging Machinery . . . . . 250 672 420 1,342 861 481
Paper Packaging . . . . . . .
Nylon Resin Manufacturing . . 134 (1,462) 103 (1,225) (1,225)
Other . . . . . . . . . . . . 1,837 1,837 70 1,767
------- -------- ------ -------- ------- --------
Reserve balance December 31, 1993. . . . . . . . . . . (3,716) (12,553) (2,777) (19,046) (9,894) (9,152)
------- -------- ------ -------- ------- --------
1994 RESERVE CHARGES: Packaging Machinery . . . . . 1,614 2,514 982 5,110 2,932 2,178
Paper Packaging . . . . . . . 1,116 3,324 311 4,751 3,900 851
Nylon Resin Manufacturing . . 122 6,416 468 7,006 (2,442) 9,448
Other . . . . . . . . . . . . 73 8 240 321 (36) 357
------- -------- ------ -------- ------- --------
Reserve balance December 31, 1994. . . . . . . . . . . $ (791) $(291) $ (776) $(1,858) $(5,540) $ 3,682
------- -------- ------ -------- ------- --------
1995 RESERVE CHARGES: Packaging Machinery . . . . . 252 1,073 1,325 1,325
Paper Packaging . . . . . . . 249 (1,288) 698 (341) (523) 182
Nylon Resin Manufacturing . . 2 338 340 340
Other . . . . . . . . . . . . 248 140 388 388
------- -------- ------ -------- ------- --------
Reserve balance December 31, 1995. . . . . . . . . . . $ (40) $ (1,439) $ 1,333 $ (146)(A) $(4,010) $ 3,864
------- -------- -------- ------ ------- -------
------- -------- -------- ------ ------- -------
</TABLE>
(A) Restored to income in June 1995.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTE 5 --INVENTORIES
The Company utilizes the LIFO method of inventory valuation for essentially
all domestic inventories. Approximately 81 percent of the December 31, 1995, and
84 percent of the December 31, 1994, 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) 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C>
Raw materials and supplies . . . . . . . . . . . . . . $ 79,170 $ 83,198
Work in process and
finished goods . . . . . . . . . . . . . . . . . . . 151,745 140,425
--------- --------
230,915 223,623
Excess of current cost
over LIFO inventory value. . . . . . . . . . . . . . (52,830) (55,470)
---------- --------
Total inventories. . . . . . . . . . . . . . . . . . . $178,085 $168,153
---------- --------
---------- --------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTE 6--PENSION PLANS
Total pension expense in 1995, 1994, and 1993 was $8,516,000, $7,704,000,
and $7,908,000, respectively.
Defined contribution plans cover employees at nine different manufacturing
or administrative locations and provide for contributions ranging from 2 percent
to 6 percent of covered employees' salaries or wages and totaled $1,222,000 in
1995, $1,316,000 in 1994, and $1,125,000 in 1993. Multiemployer plans cover
employees at two 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 1995, 1994, and 1993 totaled $1,000,000,
$1,034,000, and $974,000, respectively.
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.
CONTINUED
33
<PAGE>
NOTE 6--PENSION PLANS CONTINUNED
The funded status of the defined benefit plans at December 31, 1995, 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 . . . . . . . . . . . . . $132,152 $68,231
Nonvested benefit obligation. . . . . . . . . . . . 7,584 2,535
-------- --------
Accumulated benefit obligation. . . . . . . . . . . $139,736 $70,766
-------- --------
-------- --------
Projected benefit obligation . . . . . . . . . . . . . $164,614 $74,412
Plan assets at fair value. . . . . . . . . . . . . . . 159,243 61,513
-------- --------
Projected benefit obligations
in excess of plan assets. . . . . . . . . . . . . . (5,371) (12,899)
Unrecognized net obligation. . . . . . . . . . . . . . 7,469 2,400
Unrecognized prior service cost. . . . . . . . . . . . (1,221) 5,910
Unrecognized net (gain) loss . . . . . . . . . . . . . (8,945) 6,150
-------- --------
(Pension liability) or prepaid
pension cost. . . . . . . . . . . . . . . . . . . . $ (8,068) $ 1,561
-------- --------
-------- --------
</TABLE>
Pension cost for defined benefit plans included the following components:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1995 1994 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost -- benefits earned
during the year . . . . . . . . . . . . . . . . . . $5,928 $5,942 $5,458
Interest cost on projected
benefit obligation. . . . . . . . . . . . . . . . . 15,611 15,199 14,983
Actual return on plan assets . . . . . . . . . . . . . (43,589) 1,241 (12,042)
Net amortization and deferral. . . . . . . . . . . . . 27,641 (17,781) (3,387)
------- ------- -------
Net pension expense. . . . . . . . . . . . . . . . . . $ 5,591 $ 4,601 $ 5,012
------- ------- -------
------- ------- -------
</TABLE>
The Company has recorded the following amounts pursuant to Statement of
Financial Accounting Standards No. 87, Employers' Accounting for Pensions at
December 31:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C>
Intangible asset . . . . . . . . . . . . . . . . . . . $ 7,725 $ 7,215
Prepaid tax. . . . . . . . . . . . . . . . . . . . . . 1,174 4,149
Pension liability. . . . . . . . . . . . . . . . . . . (10,814) (18,132)
-------- --------
Reduction in stockholders' equity. . . . . . . . . . . $ (1,915) $ (6,768)
-------- --------
-------- --------
</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 7.0 percent and 5.5 percent, respectively.
The expected long-term rate of return on assets was 9.0 percent.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTE 7--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.
Net periodic postretirement benefit costs for 1995, 1994, and 1993
included the following components: <TABLE><CAPTION>
(IN THOUSANDS OF DOLLARS) 1995 1994 1993
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost -- benefits earned
during the year. . . . . . . . . . . . . . . . . . $ 206 $ 415 $ 277
Interest cost on accumulated
postretirement benefit
obligation . . . . . . . . . . . . . . . . . . . . 944 1,322 1,180
Net amortization and deferral. . . . . . . . . . . . . (159) 68 1
------ ------ ------
Net periodic postretirement
benefit cost . . . . . . . . . . . . . . . . . . . $ 991 $1,805 $1,458
------ ------ ------
------ ------ ------
</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) 1995 1994 1993
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees and beneficiaries . . . . . . . . . . . . $ 8,839 $10,473 $12,967
Fully eligible active
plan participants. . . . . . . . . . . . . . . . 1,064 1,556 1,866
Other active plan
participants. . . . . . . . . . . . . . . . . . 1,797 1,939 4,687
------- ------- -------
Accumulated postretirement
benefit obligation in
excess of plan assets. . . . . . . . . . . . 11,700 13,968 19,520
Unrecognized net gain or
(loss) from past experience
different from that assumed. . . . . . . . . . . . 6,119 3,735 (2,926)
------- ------- -------
Accrued postretirement
benefit cost . . . . . . . . . . . . . . . . . . . $17,819 $17,703 $16,594
------- ------- -------
------- ------- -------
</TABLE>
For measurement purposes, a 12 percent annual rate of increase in the
per capita cost of covered health care benefits was assumed for 1996; 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, 1995, by $1,021,000 and the aggregate of the service and
interest cost components of net periodic postretirement benefit cost for the
year then ended by $118,000. The weighted-average discount rate used in
determining the accumulated postretirement benefit obligation was 7.0 percent.
34
<PAGE>
- -------------------------------------------------------------------------------
NOTE 8 -- STOCK OPTION AND INCENTIVE PLANS
The Company's stock option and stock award plans provide for the
issuance of up to 15,968,000 shares of common stock to key employees. As of
December 31, 1995, 1994, and 1993, respectively, 1,939,984, 2,346,852, and
507,618 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 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, 1995, thirteen participants hold options with expiration
dates ranging from 1996 to 2004 at option prices ranging from $5.75 to $24.63
per share with a weighted-average price of $16.54 per share.
Details of the stock option plans at December 31, 1995, 1994, and 1993,
are:
<TABLE>
<CAPTION>
PER SHARE
NUMBER OF OPTION PRICE
SHARES RANGE
- -------------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at
December 31, 1992. . . . . . . . . 810,000 $ 5.75 - $18.72
Granted. . . . . . . . . . . . . . 10,000 20.38 - 22.31
Exercised. . . . . . . . . . . . . (110,000) 8.31 - 12.63
- -------------------------------------------------------------------------------------
Outstanding at
December 31, 1993. . . . . . . . . 710,000 $ 5.75 - $22.31
Granted. . . . . . . . . . . . . . 189,766 22.06 - 24.63
Exercised. . . . . . . . . . . . . (10,000) 8.31
- -------------------------------------------------------------------------------------
Outstanding at
December 31, 1994
and December 31, 1995. . . . . . . 889,766 $ 5.75 - $24.63
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Exercisable at
December 31, 1995. . . . . . . . . 750,760 $ 5.75 - $24.63
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</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 the date of 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: $3,954,000 was expensed in 1995, $2,890,000 in
1994, and $3,685,000 in 1993.
Details of the stock award plan at December 31, 1995, 1994, and 1993,
are: <TABLE><CAPTION>
NUMBER OF
SHARES
- -----------------------------------------------------------
<S> <C>
Outstanding at December 31, 1992 . . . . 1,142,052
Paid . . . . . . . . . . . . . . . (4,446)
Cancelled. . . . . . . . . . . . . (13,290)
---------
Outstanding at December 31, 1993 . . . . 1,124,316
Paid . . . . . . . . . . . . . . . 2,000
Cancelled. . . . . . . . . . . . . (31,000)
---------
Outstanding at December 31, 1994 . . . . 1,095,316
Granted. . . . . . . . . . . . . . 436,500
Paid . . . . . . . . . . . . . . . (431,316)
Cancelled. . . . . . . . . . . . . (29,632)
---------
Outstanding at December 31, 1995 . . . . 1,070,868
---------
---------
</TABLE>
- -------------------------------------------------------------------------------
NOTE 9 -- 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 20 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 $9,242,000 in 1995, $9,601,000 in 1994, and $10,268,000
in 1993.
The present values of minimum future obligations shown in the following
chart are calculated based on interest rates (ranging from 10 percent to
11 1/2 percent with a weighted-average of approximately 10 1/4 percent)
determined to be applicable at the inception of the leases. Interest expense
on the outstanding obligations under capital leases was $21,000 in 1995,
$255,000 in 1994, and $418,000 in 1993.
Minimum future obligations on leases in effect at December 31, 1995,
are: <TABLE><CAPTION>
CAPITAL OPERATING
(IN THOUSANDS OF DOLLARS) LEASES LEASES
- ------------------------------------------------------------------
<S> <C> <C>
1996 . . . . . . . . . . . . . . . . . $ 8 $ 4,687
1997 . . . . . . . . . . . . . . . . . 8 2,460
1998 . . . . . . . . . . . . . . . . . 7 1,947
1999 . . . . . . . . . . . . . . . . . 7 1,357
2000 . . . . . . . . . . . . . . . . . 4 1,151
Thereafter . . . . . . . . . . . . . . 0 5,460
--- ------
Total minimum obligations. . . . . . . 34 $17,062
------
------
Less amount representing interest. . . 5
---
Present value of net
minimum obligations . . . . . . . . 29
Less current portion . . . . . . . . . 5
---
Long-term obligations. . . . . . . . . $24
---
---
</TABLE>
35
<PAGE>
- --------------------------------------------------------------------------------
NOTE 10 -- LONG-TERM DEBT
Long-term debt maturing in years 1997 through 2000 is $2,261,000,
$1,700,000, $1,700,000, and $0, respectively.
Under the terms of a revolving credit agreement with five banks, the
Company may borrow up to $100,000,000 through August 1, 2000. The Company
must pay a facility fee of 1/8 of 1 percent annually on the entire amount of
the commitment. There were no borrowings outstanding under this agreement at
December 31, 1995. <TABLE><CAPTION>
(IN THOUSANDS OF DOLLARS) 1995 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial paper payable through 1996 at an interest rate of 6%(1). . . . . $ 37,500 $145,316
Note payable in 2005 at an interest rate of 6.7%(2). . . . . . . . . . . . . 100,000
Industrial revenue bonds payable through 2011
at interest rates of 5% to 7 1/4% . . . . . . . . . . . . . . . . . . . . . . 23,250 23,250
Debt of subsidiary companies payable through 1999
at an interest rate of 6%. . . . . . . . . . . . . . . . . . . . . . . . . 9,061 2,883
Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . 29 1,032
-------- -------
169,840 172,481
Less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,405 753
-------- --------
$166,435 $171,728
-------- --------
-------- --------
</TABLE>
(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 INTEREST RATE OF COMMERCIAL PAPER OUTSTANDING AT
DECEMBER 31, 1995, WAS 6 PERCENT. THE MAXIMUM OUTSTANDING AT ANY MONTH-END
DURING 1995 WAS $166,439,000, AND THE AVERAGE OUTSTANDING DURING 1995 WAS
$101,376,000. THE WEIGHTED-AVERAGE INTEREST RATE DURING 1995 WAS 6 PERCENT.
(2) IN JULY, THE COMPANY SOLD $100,000,000 OF TEN-YEAR NOTES WITH A COUPON OF
6.7 PERCENT. PROCEEDS FROM THE SALE WERE USED TO PAY OFF OUTSTANDING
COMMERCIAL PAPER DEBT.
- -------------------------------------------------------------------------------
NOTE 11 -- INCOME TAXES
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. income before income taxes. . . . . . . . . . . $119,880 $111,217 $72,643
Non-U.S. income before income taxes. . . . . . . . . 19,130 10,108 5,404
Consolidating eliminations . . . . . . . . . . . . . (2,900) (3,231) (3,670)
-------- -------- -------
Income before income taxes . . . . . . . . . . . . . $136,110 $118,094 $74,377
-------- -------- -------
-------- -------- -------
Income tax expense consists of the following components:
Current tax expense:
U.S. federal. . . . . . . . . . . . . . . . . . $ 34,496 $ 31,053 $31,578
Foreign . . . . . . . . . . . . . . . . . . . . 5,665 3,947 1,544
State and local . . . . . . . . . . . . . . . . 5,755 4,144 4,234
-------- -------- -------
Total current tax expense. . . . . . . . . . . 45,916 39,144 37,356
-------- -------- -------
Deferred (prepaid) tax expense:
U.S. federal. . . . . . . . . . . . . . . . . . 5,071 5,349 (7,408)
Foreign . . . . . . . . . . . . . . . . . . . . (333) (277)
State . . . . . . . . . . . . . . . . . . . . . 246 807 (1,371)
-------- -------- -------
Total deferred (prepaid) tax expense. . . . . . 4,984 6,156 (9,056)
-------- -------- -------
Total income tax expense . . . . . . . . . . $ 50,900 $ 45,300 $28,300
-------- -------- -------
-------- -------- -------
</TABLE>
CONTINUED
36
<PAGE>
Note 11-- INCOME TAXES CONTINUED
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>
<CAPTION>
(IN THOUSANDS OF DOLLARS) 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DEFERRED TAX ASSETS:
Accounts receivable, principally due to allowances for
returns and doubtful accounts. . . . . . . . . . . . . . . . . . . . $ 7,158 $ 6,180 $ 2,538
Inventories, principally due to additional costs inventoried for
tax purposes pursuant to the Tax Reform Act of 1986. . . . . . . . . 6,883 7,685 5,876
Employee compensation and benefits accrued for financial
reporting purposes . . . . . . . . . . . . . . . . . . . . . . . . . 14,033 12,340 9,861
Restructuring costs. . . . . . . . . . . . . . . . . . . . . . . . . . 743 9,374
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,834 1,997 785
------ ------- -------
Deferred tax assets (included in prepaid expenses and
deferred charges). . . . . . . . . . . . . . . . . . . . . . . . . . $29,908 $28,945 $28,434
------- ------- -------
------- ------- -------
Deferred tax liabilities:
Plant and equipment, principally due to differences in depreciation,
capitalized interest, and capitalized overhead . . . . . . . . . . . $65,296 $54,058 $47,945
Noncurrent employee compensation and benefits accrued for . . . . . .
financial reporting purposes . . . . . . . . . . . . . . . . . . . . (15,052) (15,513) (13,867)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (486) 1,468 1,735
------- ------- --------
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . $49,758 $40,013 $35,813
------- ------- --------
------- ------- --------
</TABLE>
The Company's effective tax rate differs from the federal statutory rate
due to the following items:
<TABLE>
<CAPTION>
(IN THOUSANDS OF DOLLARS)) 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
% OF INCOME % OF INCOME % OF INCOME
AMOUNT BEFORE TAX AMOUNT BEFORE TAX AMOUNT BEF0RE TAX
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Computed "expected" tax expense on
income before taxes at statutory rate. . . . . . $47,639 35.0% $41,333 35.0% $26,032 35.0%
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 . . . . . . . . . . . 3,901 2.9 3,218 2.7 1,861 2.5
Foreign tax rate differential. . . . . . . . . . (1,716) (1.3) 126 0.1 (802) (1.1)
Minority interest. . . . . . . . . . . . . . . . 1,323 1.0 1,183 1.0 826 1.1
Miscellaneous items. . . . . . . . . . . . . . . (247) (0.2) (560) (0.4) (2)
------- ------ ------- ----- --------- -----
Actual income tax expense. . . . . . . . . . . . . . $50,900 37.4% $45,300 38.4% $28,300 38.0%
------- ------ ------- ----- --------- -----
------- ------ ------- ----- --------- -----
</TABLE>
The Company's federal income tax returns for the years prior to 1992
have been audited and completely settled.
Provision has not been made for U.S. or additional foreign taxes on
$79,593,000 of undistributed earnings of foreign subsidiaries because 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.
37
<PAGE>
Note 12 -- 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 five of the Annual Report.
LINES OF BUSINESS
<TABLE>
<CAPTION>
(in millions of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES TO UNAFFILIATED CUSTOMERS:
Flexible Packaging . . . . . . . . $1,090.3 $ 978.8 $ 905.3
Specialty Coated and Graphics. . . 437.9 415.3 300.5
INTERSEGMENT SALES:
Flexible Packaging . . . . . . . . (0.5) (0.3) (0.2)
Specialty Coated and Graphics. . . (4.3) (3.3) (2.1)
--------- --------- ---------
Total . . . . . . . . . . . . $1,523.4 $1,390.5 $1,203.5
--------- --------- ---------
--------- --------- ---------
OPERATING PROFIT:
Flexible Packaging . . . . . . . . $ 123.0 $ 107.6 $ 73.7
Specialty Coated and Graphics. . . 46.6 43.7 28.4
--------- --------- ---------
Total operating profit 1. . . 169.6 151.3 102.1
General corporate expenses . . . . (18.1) (21.4) (18.1)
Interest expense . . . . . . . . . (11.6) (8.4) (7.2)
Minority interest in net income. . (3.8) (3.4) (2.4)
--------- --------- ---------
Income before income taxes. . $ 136.1 $ 118.1 $ 74.4
--------- --------- ---------
--------- --------- ---------
IDENTIFIABLE ASSETS:
Flexible Packaging . . . . . . . . $ 729.2 $ 638.2 $ 551.9
Specialty Coated and Graphics. . . 247.5 229.9 186.7
--------- --------- ---------
Total identifiable assets 2 . 976.7 868.1 738.6
Corporate assets 3. . . . . . 53.9 55.2 51.2
--------- --------- ---------
Total . . . . . . . . . . . . $1,030.6 $ 923.3 $ 789.8
--------- --------- ---------
--------- --------- ---------
DEPRECIATION AND AMORTIZATION:
Flexible Packaging . . . . . . . . $ 42.2 $ 36.9 $ 34.0
Specialty Coated and Graphics. . . 14.6 13.7 11.8
Corporate. . . . . . . . . . . . . 1.2 1.2 1.2
--------- --------- ---------
Total . . . . . . . . . . . . $ 58.0 $ 51.8 $ 47.0
--------- --------- ---------
--------- --------- ---------
EXPENDITURES FOR PROPERTY
AND EQUIPMENT:
Flexible Packaging . . . . . . . . $ 78.0 $ 81.3 $ 52.6
Specialty Coated and Graphics. . . 14.9 10.2 7.0
Corporate. . . . . . . . . . . . . 0.7 1.6 1.1
--------- --------- ---------
Total . . . . . . . . . . . . $ 93.6 $ 93.1 $ 60.7
--------- --------- ---------
--------- --------- ---------
<CAPTION>
OPERATIONS BY GEOGRAPHIC AREAS
(in millions of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
NET SALES TO
UNAFFILIATED CUSTOMERS:
United States. . . . . . . . . . . $1,317.9 $1,209.5 $1,031.6
Canada . . . . . . . . . . . . . . 48.0 42.7 42.4
Europe . . . . . . . . . . . . . . 184.5 158.5 147.6
Other. . . . . . . . . . . . . . . 0.5 0.2
Eliminations . . . . . . . . . . . (27.5) (20.4) (18.1)
--------- --------- ---------
Total . . . . . . . . . . . . $1,523.4 $1,390.5 $1,203.5
--------- --------- ---------
--------- --------- ---------
OPERATING PROFIT:
United States. . . . . . . . . . . $ 151.3 $ 136.8 $ 96.8
Canada . . . . . . . . . . . . . . 6.2 4.3 2.7
Europe . . . . . . . . . . . . . . 15.2 11.6 5.6
Other. . . . . . . . . . . . . . . (0.2) (0.1)
Eliminations . . . . . . . . . . . (2.9) (1.3) (3.0)
--------- --------- ---------
Total . . . . . . . . . . . . $ 169.6 $ 151.3 $ 102.1
--------- --------- ---------
--------- --------- ---------
IDENTIFIABLE ASSETS:
United States. . . . . . . . . . . $828.9 $741.6 $ 608.6
Canada . . . . . . . . . . . . . . 25.4 24.4 29.4
Europe . . . . . . . . . . . . . . 127.0 110.4 107.6
Other. . . . . . . . . . . . . . . 1.1 0.8
Eliminations . . . . . . . . . . . (5.7) (9.1) (7.0)
--------- --------- ---------
Total . . . . . . . . . . . . $ 976.7 $ 868.1 $ 738.6
--------- --------- ---------
--------- --------- ---------
</TABLE>
(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 each segment's operations.
(3) Corporate assets are principally cash and short-term investments, prepaid
expenses, and corporate property.
- --------------------------------------------------------------------------------
Note 13 -- CONTINGENCIES
The Company is a 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 or
operating results of the Company.
38
<PAGE>
NOTE 14 -- 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) 1995 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales of consolidated
foreign subsidiaries $231,940 $198,521 $188,559
Net income of
consolidated foreign
subsidiaries 12,618 5,349 3,398
Foreign earnings in excess
of or (less than) amounts
received 9,718 2,089 (272)
Equity in net assets 94,329 78,779 70,153
Equity in total assets $150,932 $133,320 $127,333
</TABLE>
NOTE 15 -- FINANCIAL INSTRUMENTS
The Company enters into forward foreign currency exchange contracts to hedge
certain foreign currency denominated receivables and payables. Exchange gains
and losses arising from these transactions are deferred and recognized when the
transaction for which the hedge was obtained is finalized. At December 31, 1995
and 1994, the Company had outstanding forward foreign currency exchange
contracts aggregating $17,377,000 and $16,127,000, respectively. Forward foreign
currency exchange contracts generally have maturities of less than nine months
and relate primarily to major Western currencies. Counterparties to the forward
foreign currency exchange contracts are major financial institutions. Credit
loss from counterparty nonperformance is not anticipated. Based on quoted year-
end market prices of forward foreign currency exchange contracts the Company
would have experienced a $559,000 loss at December 31, 1995, and a $52,000 loss
at December 31, 1994, had outstanding contracts been settled at those respective
dates.
At December 31, 1995 and 1994, the carrying value approximates the fair value
of financial instruments such as cash, trade receivables and payables, and
short-term debt because of the short-term maturities of these instruments. The
fair value of the Company's long-term debt, including current maturities but
excluding capitalized leases, is estimated to be $178,393,000 and $172,277,000
at December 31, 1995 and 1994, respectively, using discounted cash flow
analyses, based on the incremental borrowing rates currently available to the
Company for similar debt with similar terms and maturity.
The Company is also a party to letters of credit totaling $7,788,000 and
$8,004,000 at December 31, 1995 and 1994, respectively. In the Company's past
experience, virtually no claims have been made against these financial
instruments. Management does not expect any material losses to result from these
off-balance-sheet instruments because performance is not expected to be
required, and, therefore, is of the opinion that the fair value of these
instruments is zero.
Concentrations of credit risk with respect to trade accounts receivable are
limited due to the large number of entities comprising the Company's customer
base and their dispersion across many different industries and countries. As of
December 31, 1995 and 1994, the Company had no significant concentrations of
credit risk.
NOTE 16 -- QUARTERLY FINANCIAL INFORMATION -- UNAUDITED
<TABLE>
<CAPTION>
(IN MILLIONS OF DOLLARS EXCEPT EPS)
- ------------------------------------------------------------------------------------------------------------------------------------
QUARTERLY
RESULTS Net Sales Gross Profit Net Income Earnings Per Share
- ------------------------------------------------------------------------------------------------------------------------------------
% % % %
Quarter 1995 1994 Change 1995 1994 Change 1995 1994 Change 1995 1994 Change
-------------------------- -------------------------- --------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First. . . $ 368.5 $ 323.3 14% $ 77.9 $ 72.3 8% $16.1 $13.6 18% $ .31 $ .26 19%
Second . . 383.2 337.7 13 83.5 75.4 11 21.1 18.7 13 .41 .36 14
Third. . . 372.5 356.2 5 79.7 77.1 3 20.8 18.3 14 .40 .35 14
Fourth . . 399.2 373.3 7 98.8 88.5 12 27.2 22.2 22 .51 .43 19
-------------------------- -------------------------- --------------------------- --------------------------
Total. . . $1,523.4 $1,390.5 10% $339.9 $313.3 8% $85.2 $72.8 17% $1.63 $1.40 16%
-------------------------- -------------------------- --------------------------- --------------------------
-------------------------- -------------------------- --------------------------- --------------------------
</TABLE>
39
<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, 1995.
<TABLE>
<CAPTION>
Percentage of
Jurisdiction Voting Securities
of Owned By
Name Organization Immediate Parent
- -------------------------------------------------------------------------------
<S> <C> <C>
Bemis Company, Inc. (the "Registrant")
Banner Packaging, Inc. Wisconsin 100%
Bemis Export Co. Ltd. Jamaica 80%
Bolsas Bemis S.A. de C.V. Mexico 50%
Curwood , Inc. Delaware 100%
Curwood Packaging (Canada) Limited Canada 100%
Hayssen Manufacturing Company Delaware 100%
Bemis U.K. Limited United Kingdom 50%
Hayssen Europa Limited United Kingdom 100%
Hayssen Europa GmbH Germany 100%
Hayssen Europa S.p.A. Italy 100%
Hayssen Mexico S.A. de C.V. Mexico 98%
Hayssen Mexico S.A. de C.V. Mexico 2%
MacKay, Inc. Kentucky 100%
Mankato Corporation Delaware 100%
Milprint, Inc. Wisconsin 100%
Morgan Adhesives Company Ohio 86.9%
Accraply, Inc. Ohio 100%
Bemis Coordination Center S.A. Belgium 33%
Bemis Export Co. Ltd. Jamaica 20%
Bemis U.K. Limited United Kingdom 50%
MACtac U.K. Limited United Kingdom 100%
MACtac Europe S.A. Belgium 89%
Bemis Coordination Center S.A. Belgium 67%
Bemis Technologies S.A. Belgium 100%
MACtac Deutschland GmbH Germany 100%
MACtac France S.a.r.l. France 100%
MACtac Scandinavia A.B. Sweden 100%
MACtac Canada Ltd/Ltee Canada 100%
MACtac Europe S.A. Belgium 11%
MACtac U.K. Limited United Kingdom 100%
MACtac A.G. Switzerland 100%
MACtac Mexico S.A. Mexico 49%
MACtac, Inc. Ohio 100%
Pervel Industries, Inc. Delaware 100%
</TABLE>
- 23 -
<PAGE>
BEMIS COMPANY, INC.
222 South Ninth Street, Suite 2300
Minneapolis, Minnesota
55402-4099
(612) 376-3000
Benjamin R. Field, III
Senior Vice President, Chief
Financial Officer and Treasurer
<PAGE>
APPENDIX TO THE ELECTRONIC FILING - 1995 FORM 10-K
Data appearing on bar charts on page one of the 1995 Annual Report.
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings Per Share $ 1.03 $ 1.10 $ .86 $ 1.40 $ 1.63
Net Sales ($ Millions) $1,142 $1,181 $1,203 $1,390 $1,523
Return on Average
Total Capital 11.8% 11.8% 9.2% 13.4% 13.5%
Dividends paid Per
Common Share $ .42 $ .46 $ .50 $ .54 $ .64
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
DECEMBER 31, 1995, CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED
BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 22,032
<SECURITIES> 0
<RECEIVABLES> 201,725
<ALLOWANCES> 0
<INVENTORY> 178,085
<CURRENT-ASSETS> 442,274
<PP&E> 819,318
<DEPRECIATION> (284,767)
<TOTAL-ASSETS> 1,030,595
<CURRENT-LIABILITIES> 219,215
<BONDS> 166,435
0
0
<COMMON> 5,781
<OTHER-SE> 507,027
<TOTAL-LIABILITY-AND-EQUITY> 1,030,595
<SALES> 1,523,390
<TOTAL-REVENUES> 1,523,390
<CGS> 1,183,514
<TOTAL-COSTS> 1,183,514
<OTHER-EXPENSES> (3,138)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,549
<INCOME-PRETAX> 136,110
<INCOME-TAX> 50,900
<INCOME-CONTINUING> 85,210
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 85,210
<EPS-PRIMARY> 1.63
<EPS-DILUTED> 1.63
</TABLE>
