-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, kUEGi+52mOQHusanhInxz2W0Gc4Pech0grWXHu2chm6azfQL+QTEkRZ1/ICGURux XafAyJqlIOmQpD9rnq32pA== 0000912057-94-003588.txt : 19941031 0000912057-94-003588.hdr.sgml : 19941031 ACCESSION NUMBER: 0000912057-94-003588 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941028 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEMIS CO INC CENTRAL INDEX KEY: 0000011199 STANDARD INDUSTRIAL CLASSIFICATION: 2670 IRS NUMBER: 430178130 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05277 FILM NUMBER: 94555713 BUSINESS ADDRESS: STREET 1: 222 S 9TH ST STE 2300 CITY: MINNEAPOLIS STATE: MN ZIP: 55402-4099 BUSINESS PHONE: 6123763000 MAIL ADDRESS: STREET 2: 222 S 9TH STREET SUITE 2300 CITY: MINNEAPOLIS STATE: MN ZIP: 55402-4099 10-Q 1 FORM 10-Q 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 Nine Months Ended September 30, 1994 Commission File Number 0-1387 BEMIS COMPANY, INC. (Exact name of registrant as specified in its charter) Missouri 43-0178130 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 222 South 9th Street, Suite 2300 Minneapolis, Minnesota 55402-4099 (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (612) 376-3000 Indicate by check mark whether the registrant has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- Aggregate market value of the voting stock held by non-affiliates of the registrant 51,211,326 shares at $24.50 per share as of October 25, 1994 - $1,254,677,000 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The financial statements (enclosed as Exhibit 21) are incorporated by reference in this Form 10-Q. In the opinion of management, the financial statements reflect all adjustments necessary to a fair statement of the results for the nine months ended September 30, 1994. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - THIRD QUARTER 1994 Net Sales for the third quarter of 1994 were $356.2 million compared to $299.5 million for the third quarter of 1993, an increase of 18.9% or $56.7 million. Net Income was $18.3 million for the third quarter of 1994 and $1.0 million for the same quarter in 1993. Exclusive of a third quarter 1993 restructuring charge of $13.1 million aftertax, Net Income was $14.1 million. During the third quarter, increased unit volume, the effective penetration of new accounts and the strengthening our share in key markets were major factors in our sales and profit increases. In addition, recent acquisitions and restructuring measures undertaken in 1993 also contributed to our improved performance. While we have absorbed many raw material price increases this year, higher unit sales and our own efforts to increase prices have helped minimize the profit impact. We expect these conditions to continue in the fourth quarter. In the first quarter of 1994, the Company completed the acquisitions of Fitchburg Coated Products and Hargro Health Care Packaging. In addition, during the third quarter of 1993, the Company recorded a $21 million pretax restructuring charge. Excluding non-comparable operating results of business acquisitions and dispositions and restructuring charges from both 1994 and 1993, third quarter Net Sales showed an increase of $34.9 million or 11.7% and operating profit showed an increase of $5.5 million or 18.2%. Net Sales and operating income improved for both the Flexible Packaging and the Specialty Coated and Graphics Products Lines of Business because of increased product demand and business acquisitions or dispositions made in the first quarter of 1994 or 1993, together with our nearly completed restructuring efforts. Excluding non-comparable operating results from the third quarter of both 1994 and 1993 shows that Net Sales and operating profit increased 8.9% and 9.4%, respectively, for the Flexible Packaging segment and 20.8% and 53.4%, respectively for the Specialty Coated and Graphics Products segment. -2- PART I - FINANCIAL INFORMATION Addressing the Statement of Income line item changes of consequence. Cost of Products sold increased 19.4% on total sales increases of 18.9%. Improvements in manufacturing efficiencies which resulted in lower manufacturing cost, expressed as a percent of sales, have not been sufficient to offset sharply increased material cost. Selling, General and Administrative Expenses, expressed as a percent of Net Sales were 11.6% compared to 12.4% in the third quarter of 1993, on an 18.9% increase in Net Sales reflecting cost control efforts and economies available through increasing volume. Increased Research and Development expenditures occurred in both Lines of Business. Increasing interest rates and a higher debt level have resulted in an increase in Interest Expense. The significant decrease in Other Expense is substantially due to the $21 million restructuring charge recorded in the third quarter of 1993. The increase in Minority Interest in Net Income reflects the improvement in our pressure-sensitive materials business. Pretax Income increased $26.7 million. Exclusive of the third quarter 1993 restructuring charge, Pretax Income increased $5.7 million or 23.9%. The effective tax rate for the third quarter of 1994 and 1993 was 38.2% and 66.1%, respectively, reflecting the retroactive application of tax legislation enacted in the third quarter of 1993. RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1994 Net Sales for the nine-month period of 1994 were $1,017 million compared to $895.4 million for the same period 1993, an increase of 13.6%. Net Income was $50.6 million for 1994 compared to $27.2 million for the same nine-month period in 1993. Excluding the operating results of the acquisition and dispositions and restructuring charges from both 1994 and 1993, Net Sales for the first nine months of 1994 increased $65.1 million or 7.4% from the same period of 1993, while pretax income increased $15.1 million or 24.8%. Cost of Products sold increased 13.6% on Net Sales increases of 13.6%. Improvements in manufacturing efficiencies which resulted in lower manufacturing cost, expressed as a percent of sales, have offset increased material cost. -3- PART I - FINANCIAL INFORMATION Increased Research and Development expenditures have occurred in both business segments, principally in coated and laminated products and pressure- sensitive materials products. The significant change in Other Income is principally due to the $21 million restructuring charge recorded in the third quarter of 1993 partially offset by non-recurring gains on minor business sales which occurred in 1993. Pretax Income increased $37.3 or 84.2% reflecting the improving domestic and European economic climate together with ongoing internal efforts to restructure and streamline business operations. In the third quarter of 1993, the Company incurred a pretax restructuring charge of $21 million related primarily to the planned closedown of its Nylon Resin production facility ($6.2 million), the realignment of assets in both the domestic and international packaging machinery business ($7.2 million), the consolidation of two paper packaging plants into larger facilities ($5.0 million) and selected other actions to improve operating efficiency throughout the Company ($2.6 million). When completed, these 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. As of September 30, 1994, we have finalized all of the planned plant closures and 90% of job reductions and employee relocations. The balance should be completed prior to year end. Of the $21 million total restructuring expenses, we expected $11.4 million of non-cash cost and $9.6 million of net cash expense, all of which would be internally generated. Through September 30, 1994, our cash costs have totalled $2.3 million and non-cash costs $14.1 million. The majority of the remaining cash and non-cash expenses are expected to be incurred in the fourth quarter of this year with the possible exception of finalizing one sale and one lease cancellation on the closed facilities. As stated in our 1993 third quarter report, when fully implemented, these restructuring costs should produce annual savings of approximately $8.0 million pretax (10 cents per share). -4- PART I - FINANCIAL INFORMATION FINANCIAL CONDITION A statement of cash flow for the nine months ended September 30, 1994, is as follows:
Millions -------- Cash flows from operating activities: ------------------------------------- Net income $ 50.6 Non-cash items: Depreciation and amortization 40.6 Minority interest 2.3 Deferred income taxes, non-current portion 1.3 Net increase in working capital items, net of affects of business acquisitions (13.4) Net change in deferred charges and credits (2.2) Loss on sale of property and equipment 0.4 Other 1.8 ------ Net cash provided by operating activities 81.4 ------ CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment (72.1) Business acquisitions (33.2) Other 3.3 ------ Net cash used in investing activities (102.0) ------ CASH FLOWS FROM FINANCING ACTIVITIES: Increase in long-term debt 49.1 Increase in short-term debt 0.3 Cash dividends paid (20.7) ------ Net cash provided by financing activities 28.7 ------ Effect of exchange rates 2.3 ------ Net increase in cash $ 10.4 ------ ------
-5- PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There have been no significant changes during the nine months ended September 30, 1994. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibit 21 - Financial Statements Furnished to Security Holders 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 October 26, 1994 S\ LeRoy F. Bazany ------------------------------ --------------------------------------- LeRoy F. Bazany, Vice President and Controller Date October 26, 1994 S\ B. R. Field, III ------------------------------ --------------------------------------- Benjamin R. Field, III, Senior Vice President, Chief Financial Officer and Treasurer -6- EX-21 2 EXHIBIT 21 EXHIBIT 21 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended September 30 September 30 ------------------ ----------------- 1994 1993 1994 1993 ---- ---- ---- ---- Net sales $356,243 $299,541 $1,017,264 $895,420 Costs and expenses: Cost of products sold 279,109 233,736 792,387 697,222 Selling, general and administrative expenses 41,463 37,050 125,428 118,684 Research and development 3,597 3,246 10,846 9,930 Interest expense 2,111 1,735 5,643 5,522 Other (income) expense (461) 20,454 (1,004) 18,048 Minority interest in net income 832 445 2,300 1,677 -------- -------- ---------- -------- Income before income taxes 29,592 2,875 81,664 44,337 Taxes based on income - cash 10,943 9,450 29,771 27,643 Taxes based on income - deferred 357 (7,550) 1,329 (10,543) -------- -------- ---------- -------- Net income $ 18,292 $ 975* $ 50,564 $ 27,237* -------- -------- ---------- -------- -------- -------- ---------- -------- Earnings per share of common stock $ .35 $ .02* $ .97 $ .53* -------- -------- ---------- -------- -------- -------- ---------- -------- Cash dividends paid $ .135 $ .125 $ .405 $ .375 -------- -------- ---------- -------- -------- -------- ---------- -------- Average common shares and common stock equivalents outstanding 51,977 51,759 51,936 51,755 -------- -------- ---------- -------- -------- -------- ---------- -------- * A restructuring charge of $13,100 or 25 cents per share was recorded during the third quarter of 1993. Exclusive of this charge, earnings for the third quarter and nine months of 1993 would have been $14,075 or 27 cents per share and $40,337 or 78 cents per share, respectively.
EXHIBIT 21 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN THOUSANDS OF DOLLARS)
Sep 30 Dec 31 ASSETS 1994 1993 ---- ---- Cash $ 19,337 $ 8,911 Accounts receivable - net 189,345 161,695 Inventories 156,767 127,123 Prepaid expenses and deferred charges 43,410 39,280 --------- --------- Total current assets 408,859 337,009 --------- --------- Property and equipment, net 453,640 414,888 Excess of cost of investments in subsidiaries over net assets acquired 29,053 24,814 Other assets 13,812 13,056 --------- --------- Total 42,865 37,870 --------- --------- TOTAL ASSETS $ 905,364 $ 789,767 --------- --------- --------- --------- LIABILITIES AND STOCKHOLDERS' EQUITY Short-term borrowings $ 1,671 $ Current portion of long-term debt 3,054 4,035 Accounts payable 159,214 138,243 Accrued salaries and wages 29,559 22,015 Accrued income and other taxes 17,889 19,896 --------- --------- Total current liabilities 211,387 184,189 Long-term debt, less current portion 173,402 123,215 Deferred taxes 37,168 35,813 Other liabilities and deferred credits 53,009 54,602 --------- --------- Total liabilities 474,966 397,819 --------- --------- Minority interest 24,512 21,409 STOCKHOLDERS' EQUITY: Common stock (55,723,731 and 55,713,731 shares) 5,572 5,571 Capital in excess of par value 101,235 101,153 Retained income 427,745 397,922 Cumulative translation adjustment 4,827 (614) Common stock held in treasury (4,512,405 shares) (133,493) (133,493) --------- --------- Total stockholders' equity 405,886 370,539 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 905,364 $ 789,767 --------- --------- --------- ---------
EXHIBIT 21 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS OF DOLLARS)
Nine Months Ended September 30 ----------------------- 1994 1993 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 50,564 $ 27,237 NON-CASH ITEMS: Depreciation and amortization 40,568 36,711 Minority interest 2,300 1,677 Deferred income taxes, non-current portion 1,328 (2,831) Loss on sale of property and equipment 383 865 --------- --------- Cash provided by operations 95,143 63,659 Net change in receivables, inventories, prepaid expenses and payables (13,352) 3,804 Net change in deferred charges and credits (2,206) 8,148 Other 1,822 (753) --------- --------- Net cash provided by operating activities 81,407 74,858 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment (72,112) (45,255) Business acquisitions, net of divestitures (33,248) (7,684) Proceeds from sale of property and equipment 3,137 871 Change in long-term receivables 210 267 --------- --------- Net cash used in investing activities (102,013) (51,801) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Increase in long-term debt 49,108 13,000 Change in short-term debt 300 (1,351) Cash dividends paid (20,741) (19,187) Purchase of common stock for the treasury (1,262) Subsidiary cash dividends to minority shareholders (1,703) Stock incentive programs 83 1,115 --------- --------- Net cash provided (used) by financing activities 28,750 (9,388) --------- --------- Effect of exchange rates on cash 2,282 (1,124) --------- --------- Net increase in cash $ 10,426 $ 12,545 --------- --------- --------- ---------
EXHIBIT 21 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TAXES BASED ON INCOME The Company's 1994 effective tax rate of 38% differs from the federal statutory rate of 35% primarily due to state and local income taxes. -----END PRIVACY-ENHANCED MESSAGE-----