<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Three Months Ended March 31, 1996
Commission File Number 1-5277
BEMIS COMPANY, INC.
(Exact name of registrant as specified in its charter)
Missouri 43-0178130
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
222 South 9th Street, Suite 2300
Minneapolis, Minnesota 55402-4099
Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 376-3000
Indicate by check mark whether the registrant has: (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
YES x NO
------- -------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
52,652,689 shares of Common Stock, $.10 par value on April 30, 1996.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements, enclosed as Exhibit 19, are incorporated by
reference in this Form 10-Q.
In the opinion of management, the financial statements reflect all
adjustments necessary to a fair statement of the results for the three months
ended March 31, 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net Sales for the first quarter of 1996 were $385.5 million compared to
$368.6 million for the first quarter of 1996, an increase of 4.6 percent or
$16.9 million. Net Income was $21.7 million, or $.41 per share, for the first
quarter of 1996 compared to $16.1 million, or $.31 per share, for the same
quarter in 1995. Included in the first quarter 1996 net income was a $2.6
million net gain, or $.05 per share, relating to the disposition of the Paper
Packaging Machinery Division of Hayssen Manufacturing, Inc., a wholly-owned
subsidiary of the Company ("Hayssen") which was sold in January 1996. Excluding
this gain, earnings per share were $.36, up 16.1 percent from $.31 a year ago.
Both the Flexible Packaging and the Specialty Coated and Graphics Products
Lines of Business had increases in Net Sales over the first quarter of 1995 in
spite of the generally weak level of demand in the marketplace compared to a
year ago. Sales growth was only moderate and was affected by lower unit pricing
in plastic and paper markets and some weakness in pressure-sensitive materials
markets, especially in Europe.
Very good results were achieved in the Company's plastic packaging
operations during the first quarter of 1996, with especially strong increases in
polyethylene packaging. Continued gains in the bakery and candy markets as well
as improving activity with key accounts highlighted the improvement. In other
packaging activities, paper packaging results were down moderately from a year
ago, reflecting the fairly weak pricing environment in that industry. Packaging
machinery operations were reduced in size by the sale of the Hayssen's Paper
Packaging Machinery Division with the remaining Hayssen operation experiencing
some cyclical weakness in demand during the quarter.
Results in the pressure-sensitive materials business were down slightly
from the very strong quarter last year and reflect the poor business environment
in Europe as well as weak demand in the roll label market in the U.S. Improved
demand for certain higher margin products, however, was a positive for the
quarter.
Addressing the Statement of Income line item changes of consequence:
Cost of Products Sold increased 4.1 percent compared to Net Sales increases
of 4.6 percent. This favorable comparison results from an improved raw
material price environment compared to a year ago, good control of
overhead costs, and a product mix favoring higher margin products.
Increased Research and Development expenditures resulted from increased
product development expense principally in the Company's pressure-
sensitive materials business segment.
- 2 -
<PAGE>
PART I - FINANCIAL INFORMATION
Lower average debt levels and interest rates, account for the 9.2 percent
drop in Interest Expense.
Other Income increased $4.0 million largely due to the gain on the sale of
Hayssen's Paper Packaging Machinery Division in January 1996.
Minority Interest decreases results from reduced operating income in the
Company's pressure-sensitive materials business segment.
Pretax Income increased $9.1 million, or 35.3 percent. Excluding the one-
time gain related to the disposition of Hayssen's Paper Packaging
Machinery Division, Pretax Income increased $4.8 million, or 18.7% from
the same quarter of 1995.
The effective tax rate for the first quarter of 1996 and 1995 was 37.8
percent and 37.6 percent, respectively.
FINANCIAL CONDITION
A statement of cash flow for the three months ended March 31, 1996, is as
follows:
<TABLE>
<CAPTION>
Millions
<S> --------
Cash flows from operating activities:
------------------------------------ <C>
Net income................................................ $ 21.7
Non-cash items:
Depreciation and amortization......................... 16.9
Minority interest..................................... 0.9
Deferred income taxes, non-current portion............ 0.4
Net increase in working capital, net of effects of
dispositions......................................... (14.1)
Net change in deferred charges and credits............ 1.3
-----
Net cash provided by operating Activities................... 27.1
-----
Cash flows from investing activities:
------------------------------------
Additions to property and equipment....................... (25.1)
Business divestitures..................................... 12.8
Other..................................................... 0.1
----
Net cash used in investing activities........................ (12.2)
----
Cash flows from financing activities:
------------------------------------
Change in long-term debt.................................. 1.0
Change is short-term debt................................. (1.7)
Cash dividends paid....................................... (9.5)
Subsidiary dividends to minority stockholders............. (1.8)
----
Net cash provided by financing activities.................... (12.0)
----
Effect of exchange rates..................................... (2.5)
----
Net increase in cash......................................... $ .4
----
----
</TABLE>
- 3 -
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no significant changes during the three months ended March
31, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of the report:
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)
19 Reports Furnished to Security Holders.
27 Financial Data Schedule (EDGAR electronic filing only).
- 4 -
<PAGE>
PART II - OTHER INFORMATION
(b) There were no reports on Form 8-K filed during the first quarter ended
March 31, 1996.
---------------
* 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).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEMIS COMPANY, INC.
Date May 6, 1996 /s/LeRoy F. Bazany
------------------------- LeRoy F. Bazany, Vice President
and Controller
Date May 6, 1996
------------------------- /s/B. R. Field, III
Benjamin R. Field, III, Senior Vice
President, Chief Financial Officer
and Treasurer
- 5 -
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
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)
19 Reports Furnished to Security Holders.
27 Financial Data Schedule (EDGAR electronic filing only).
-------------
* 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).
- 6 -
<PAGE>
EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
March 31
----------------------
1996 1995
-------- --------
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . $385,511 $368,551
Costs and expenses:
Cost of products sold . . . . . . . . . . . . . . . 302,721 290,692
Selling, general, and administrative expenses . . . 45,141 45,333
Research and development. . . . . . . . . . . . . . 3,645 3,257
Interest expense. . . . . . . . . . . . . . . . . . 2,749 3,029
Other (income). . . . . . . . . . . . . . . . . . . (4,538) (538)
Minority interest in net income . . . . . . . . . . 893 988
-------- --------
Income before income taxes. . . . . . . . . . . . . . 34,900 25,790
Taxes based on income - cash. . . . . . . . . . . . 12,841 7,588
Taxes based on income - deferred. . . . . . . . . . 359 2,112
-------- --------
Net income. . . . . . . . . . . . . . . . . . . . . . $ 21,700 $ 16,090
-------- --------
-------- --------
Earnings per share of common stock. . . . . . . . . . $.41 $.31
-------- --------
-------- --------
Cash dividends paid . . . . . . . . . . . . . . . . . $.18 $.16
-------- --------
-------- --------
Average common shares and common
stock equivalents outstanding . . . . . . . . . . . 53,202 51,877
-------- --------
-------- --------
</TABLE>
<PAGE>
EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Mar 31 Dec 31
ASSETS 1996 1995
---------- ----------
<S> <C> <C>
Cash. . . . . . . . . . . . . . . . . . . . . . . $ 22,407 $ 22,032
Accounts receivable - net.. . . . . . . . . . . . 201,200 201,725
Inventories.. . . . . . . . . . . . . . . . . . . 177,280 178,085
Prepaid expenses and deferred charges . . . . . . 42,507 40,432
---------- ----------
Total current assets. . . . . . . . . . . . 443,394 442,274
---------- ----------
Property and equipment, net . . . . . . . . . . . 538,004 534,551
Excess of cost of investments in
subsidiaries over net assets acquired . . . . . 42,116 42,437
Other assets. . . . . . . . . . . . . . . . . . . 11,192 11,333
---------- ----------
Total . . . . . . . . . . . . . . . . . . . 53,308 53,770
---------- ----------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . $1,034,706 $1,030,595
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings . . . . . . . . . . . . . . $ 1,080 $ 1,080
Current portion of long-term debt . . . . . . . . 1,706 3,405
Accounts payable. . . . . . . . . . . . . . . . . 155,938 163,692
Accrued salaries and wages. . . . . . . . . . . . 24,707 29,128
Accrued income and other taxes. . . . . . . . . . 27,439 21,910
---------- ----------
Total current liabilities . . . . . . . . . 210,870 219,215
Long-term debt, less current portion. . . . . . . 167,403 166,435
Deferred taxes. . . . . . . . . . . . . . . . . . 50,181 49,758
Other liabilities and deferred credits. . . . . . 55,217 53,943
---------- ----------
Total liabilities . . . . . . . . . . . . . 483,671 489,351
---------- ----------
Minority interest . . . . . . . . . . . . . . . . 27,337 28,436
STOCKHOLDERS' EQUITY:
Common stock (57,811,966 shares). . . . . . . . 5,781 5,781
Capital in excess of par value. . . . . . . . . 147,119 147,119
Retained income . . . . . . . . . . . . . . . . 508,491 496,252
Cumulative translation adjustment . . . . . . . 9,156 10,505
Common stock held in treasury
(5,244,627 and 5,244,617 shares) . . . . . . . (146,849) (146,849)
---------- ----------
Total stockholders' equity. . . . . . . . . 523,698 512,808
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . . . $1,034,706 $1,030,595
---------- ----------
---------- ----------
</TABLE>
<PAGE>
EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS
BEMIS COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------------
1996 1995
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income. . . . . . . . . . . . . . . . . . . . $ 21,700 $ 16,090
NON-CASH ITEMS:
Depreciation and amortization . . . . . . . . . 16,944 14,948
Minority interest . . . . . . . . . . . . . . . 893 988
Deferred income taxes, non-current portion. . . 358 2,147
Loss (gain) on sale of property and equipment . 5 (3)
---------- ----------
Cash provided by operations . . . . . . . . . . . 39,900 34,170
Net change in working capital, net
of effects of dispositions. . . . . . . . . . . (14,098) (25,148)
Net change in deferred charges and credits. . . . 1,339 345
Other . . . . . . . . . . . . . . . . . . . . . . 0 667
---------- ----------
Net cash provided by operating activities . . . . 27,141 10,034
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment . . . . . . . (25,050) (24,199)
Business divestiture. . . . . . . . . . . . . . . 12,752 0
Proceeds from sale of property and equipment. . . 86 250
Change in long-term receivables . . . . . . . . . 12 (10)
---------- ----------
Net cash used in investing activities . . . . . . (12,200) (23,959)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Change in long-term debt. . . . . . . . . . . . . 968 19,398
Change in short-term debt . . . . . . . . . . . . (1,699) 133
Cash dividends paid . . . . . . . . . . . . . . . (9,461) (8,239)
Subsidiary dividends to minority stockholders.. . (1,841) 0
Stock incentive programs. . . . . . . . . . . . . 0 3,449
---------- ----------
Net cash (used) provided by financing activities. (12,033) 14,741
---------- ----------
Effect of exchange rates on cash. . . . . . . . . (2,533) 1,890
---------- ----------
Net increase in cash. . . . . . . . . . . . . . . $ 375 $ 2,706
---------- ----------
---------- ----------
</TABLE>
<PAGE>
EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS
BEMIS COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TAXES BASED ON INCOME
The Company's 1996 effective tax rate of 38% differs from the federal
statutory rate of 35% primarily due to state and local income taxes.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the March
31, 1996, Consolidated Statement of Income and Consolidated Balance Sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> $22,407
<SECURITIES> 0
<RECEIVABLES> 201,200
<ALLOWANCES> 0
<INVENTORY> 177,280
<CURRENT-ASSETS> 443,394
<PP&E> 820,964
<DEPRECIATION> (282,960)
<TOTAL-ASSETS> 1,034,706
<CURRENT-LIABILITIES> 210,870
<BONDS> 167,403
0
0
<COMMON> 5,781
<OTHER-SE> 517,917
<TOTAL-LIABILITY-AND-EQUITY> 1,034,706
<SALES> 385,511
<TOTAL-REVENUES> 385,511
<CGS> 302,721
<TOTAL-COSTS> 302,721
<OTHER-EXPENSES> (4,538)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,749
<INCOME-PRETAX> 34,900
<INCOME-TAX> 13,200
<INCOME-CONTINUING> 21,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,700
<EPS-PRIMARY> .41
<EPS-DILUTED> .41
</TABLE>
