-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vc3DwF1GIV9tv/xuvnGsVkDNXaMhEPwna+iFq2fg1Z7trCVleqSfjW/ONzc4FsxR I7tAJm1Mw0ptirDrCzNWkg== 0000912057-96-025422.txt : 19961113 0000912057-96-025422.hdr.sgml : 19961113 ACCESSION NUMBER: 0000912057-96-025422 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEMIS CO INC CENTRAL INDEX KEY: 0000011199 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [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: 96657887 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 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 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. 52,360,689 shares of Common Stock, $.10 par value on November 5, 1996 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 nine months ended September 30, 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - Third Quarter 1996 Net Sales for the third quarter of 1996 were $423.1 million compared to $372.5 million for the third quarter of 1995, an increase of 13.6 percent or $50.6 million. Net Income increased 15.4 percent to $24.0 million for the third quarter of 1996 compared to the same quarter in 1995. Third quarter results were favorably affected by continuing penetration of key markets, the success of recent acquisitions and new products, and a good level of demand in the market place. Excluding non-comparable operating results of the acquisition of the Perfecseal Division of Paper Manufacturers Company and the disposition of the Paper Packaging Machinery Division of Hayssen Manufacturing Company from both 1996 and 1995, third quarter Net Sales showed an increase of $20.5 million or 5.6 percent and operating profit showed an increase of $2.2 million or 5.4 percent. Unit volume growth in the Company's two core businesses, flexible plastic packaging and pressure-sensitive materials, was significantly higher than the 5.6 percent base business growth reflecting good demand and market penetration as well as generally lower raw material and selling price levels in many product areas compared to a year ago. Raw material prices were relatively stable during the current quarter with the exception of polyethylene resin prices which have risen 40 to 50 percent during the past several months. The size and rapidity of these increases have made it extremely difficult to adjust selling prices to match these increases on a timely basis, adversely affecting results during the third quarter of 1996. This effect may continue somewhat into the fourth quarter. Nevertheless, prospects for polyethylene packaging, as well as the Company's coated and laminated film business, are excellent as unit volume growth is very good and increased penetration of key customers and markets is ongoing. In other packaging activities, paper packaging results were relatively flat, reflecting very competitive market and pricing conditions, and packaging machinery results continue to be affected by cyclical weakness in the industry and remain well below the strong performance of a year ago. Results in the Company's pressure sensitive materials business were very strong in the quarter in comparison to a relatively weak quarter a year ago. Unit volume in the U.S. continues to improve and business in Europe is doing relatively well in spite of weak economic conditions there. - 2 - PART I - FINANCIAL INFORMATION Cost of Products sold increased 12.9 percent compared to Net Sales increases of 13.6 percent. This favorable comparison results from an improved raw material price environment compared to a year ago which more than offsets an increase in manufacturing conversion costs. Selling, General and Administrative Expenses, expressed as a percent of Net Sales, were 10.8 percent compared to 11.2 percent in the third quarter of 1995, on a 13.6 percent increase in Net Sales, continuing to reflect cost control efforts and economies available through increasing volume. Increasing debt levels, associated with the acquisition of the Perfecseal Division of Paper Manufacturers Company, partially offset by lower interest rates, account for the $1.0 million rise in Interest Expense compared to the third quarter of 1995. The $2.0 million decrease in Other Income from the third quarter of 1995 relates to income associated with a minority equity interest, the balance of which was purchased in the fourth quarter of 1995. The increase in Minority Interest reflects the continuing improvements in our pressure-sensitive materials business segment in both Europe and North America. Pretax Income increased $5.6 million principally due to improvements in marginal income. Income Tax expense increased $2.4 million or 19.8 percent. The effective tax rate for the third quarter of 1996 and 1995 was 37.6 percent and 36.7 percent, respectively. RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1996 Net Sales for the nine-month period of 1996 increased 8.6 percent to $1.2 billion compared to the same period in 1995. Net Income was $70.9 million for 1996 compared to $58.1 million for the same nine-month period in 1995, an increase of 22.2 percent. Cost of Products sold increased 7.5 percent compared to Net Sales increases of 8.6 percent reflecting a more stable and favorable raw material price environment. Increasing debt levels, associated with the acquisition of the Perfecseal Division of Paper Manufacturers Company, partially offset by lower interest rates, account for the $1.5 million rise in Interest Expense compared to the same 1995 period. Other Income increased $2.0 million largely due to the gain on the sale of Hayssen's Paper Packaging Machinery Division in January 1996, partially offset by non-recurring 1995 income associated with a minority equity interest, the balance of which was purchased in the fourth quarter of 1995. Pretax Income increased $21.3 million or 23.0 percent on a nine-month Net Sales increase of $96.3 million or 8.6 percent, reflecting the improving domestic and European economic climate together with a more stable - 3 - PART I - FINANCIAL INFORMATION domestic raw material market. The effective tax rate for the nine-month period of 1996 was 37.7 percent compared to 37.3 percent for the same period in 1995. The increase in Long-term Debt shown on the Balance Sheet together with the increase in Excess of Cost of Investments in Subsidiaries over Net Assets Acquired is primarily due to a business unit acquisition. FINANCIAL CONDITION A statement of cash flow for the nine months ended September 30, 1996, is as follows: MILLIONS -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income . . . . . . . . . . . . . . . . . . . . . . . . . $70.9 Non-cash items: Depreciation and amortization. . . . . . . . . . . . . . . 51.5 Minority interest . . . . . . . . . . . . . . . . . . . . 3.2 Deferred income taxes, non-current portion . . . . . . . . 1.6 Net decrease in working capital items . . . . . . . . . . (36.2) Net change in deferred charges and credits . . . . . . . . 5.3 ------ Net cash provided by operating activities. . . . . . . . . . . 96.3 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment . . . . . . . . . . . . (76.5) Business acquisition . . . . . . . . . . . . . . . . . . . (62.9) Business divestiture . . . . . . . . . . . . . . . . . . . 12.8 Proceeds from sales of property and equipment . . . . . . . 1.5 ------- Net cash used in investing activities . . . . . . . . . . . . (125.1) CASH FLOWS FROM FINANCING ACTIVITIES: Change in long-term debt . . . . . . . . . . . . . . . . . 68.5 Change in short-term debt . . . . . . . . . . . . . . . . . .4 Cash dividends paid . . . . . . . . . . . . . . . . . . . (28.4) Subsidiary dividends to minority stockholders . . . . . . . (1.8) Common stock purchased for the treasury . . . . . . . . . (8.9) Net cash provided by financing activities . . . . . . . . . . 29.8 ------- Effect of exchange rates . . . . . . . . . . . . . . . . . . . (1.5) ------- Net decrease in cash . . . . . . . . . . . . . . . . . . . . . $ (0.5) ======== - 4 - PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There have been no significant changes during the nine months ended September 30, 1996. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS (a) The following documents are filed as part of this 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 the Registrant 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 the Registrant, 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) - 5 - PART II - OTHER INFORMATION 19 Financial Statements Furnished to Security Holders. 27 Financial Data Schedule (EDGAR electronic filing only). (b) There were no reports on Form 8-K filed during the third quarter ended September 30, 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). - 6 - 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 November 5, 1996 LeRoy F. Bazany ----------------- ------------------------- LeRoy F. Bazany, Vice President and Controller Date November 5, 1996 Benjamin R. Field, III ----------------- ------------------------- Benjamin R. Field, III, Senior Vice President, Chief Financial Officer and Treasurer - 7 - EXHIBIT INDEX ------------- EXHIBIT - ------- 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 Financial Statements 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). - 8 - EX-19 2 FINANCIAL STMTS TO SECURITY HOLDERS EXHIBIT 19 - 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 ------------------ ----------------- 1996 1995 1996 1995 ---- ---- ---- ---- Net sales.................... $423,089 $372,506 $1,220,545 $1,124,237 Costs and expenses: Cost of products sold...... 330,479 292,830 949,161 883,172 Selling, general and administrative expenses.. 45,716 41,648 139,233 130,213 Research and development... 3,772 3,853 10,233 9,961 Interest expense........... 3,705 2,670 9,938 8,437 Other income............... (223) (2,256) (5,018) (3,059) Minority interest in net income.............. 1,107 830 3,149 2,962 ------- ------- --------- -------- Income before income taxes... 38,533 32,931 113,849 92,551 Taxes based on income - cash....... 14,250 12,087 41,316 32,079 Taxes based on income - deferred... 250 13 1,584 2,421 ------- -------- --------- --------- Net income................... $ 24,033 $ 20,831 $ 70,949 $ 58,051 ======= ======== ========= ========= Earnings per share of common stock............... $.45 $.40 $1.33 $1.12 ==== ==== ===== ===== Cash dividends paid.......... $.18 $.16 $.54 $.48 ==== ==== ===== ===== Average common shares and common stock equivalents outstanding................ 53,288 52,040 53,276 51,978 ====== ====== ====== ====== EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN THOUSANDS OF DOLLARS) Sep 30 Dec 31 ASSETS 1996 1995 ---- ---- Cash.......................................... $ 21,535 $ 22,032 Accounts receivable - net..................... 215,216 201,725 Inventories................................... 179,170 178,085 Prepaid expenses and deferred charges......... 44,573 40,432 ---------- ---------- Total current assets..................... 460,494 442,274 ---------- ---------- Property and equipment, net................... 564,130 534,551 Excess of cost of investments in subsidiaries over net assets acquired...... 94,330 42,437 Other assets.................................. 11,367 11,333 ---------- ---------- Total.................................... 105,697 53,770 ---------- ---------- TOTAL ASSETS.................................. $1,130,321 $1,030,595 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt............. $ 1,706 $ 3,405 Short-term borrowings......................... 3,188 1,080 Accounts payable.............................. 153,112 163,692 Accrued salaries and wages.................... 31,449 29,128 Accrued income and other taxes................ 17,836 21,910 ---------- ---------- Total current liabilities................ 207,291 219,215 Long-term debt, less current portion.......... 234,890 166,435 Deferred taxes................................ 51,396 49,758 Other liabilities and deferred credits........ 59,240 53,943 ---------- ---------- Total liabilities........................ 552,817 489,351 ---------- ---------- Minority interest............................. 30,652 28,436 STOCKHOLDERS' EQUITY: Common stock (57,897,316 and 57,811,966 shares)....................... 5,790 5,781 Capital in excess of par value............ 149,284 147,119 Retained income........................... 538,796 496,252 Cumulative translation adjustment......... 8,793 10,505 Common stock held in treasury (5,536,627 and 5,244,617 shares)......... (155,811) (146,849) ---------- ---------- Total stockholders' equity............... 546,852 512,808 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.... $1,130,321 $1,030,595 ========== ========== EXHIBIT 19 - 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 ----------------- 1996 1995 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income............................................. $ 70,949 $ 58,051 NON-CASH ITEMS: Depreciation and amortization...................... 51,464 44,311 Minority interest.................................. 3,149 2,962 Deferred income taxes, non-current portion......... 1,584 2,457 Loss (gain) on sale of property and equipment...... 51 (214) --------- -------- Cash provided by operations............................ 127,197 107,567 Net change in receivables, inventories, prepaid expenses and payables........................ (36,186) 3,499 Net change in deferred charges and credits............. 5,307 607 Other.................................................. 0 314 --------- -------- Net cash provided by operating activities.............. 96,318 111,987 --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment ................... (76,459) (69,035) Business acquisition................................... (62,914) Business divestiture................................... 12,752 Proceeds from sale of property and equipment........... 1,535 1,984 Change in long-term receivables........................ 12 (14) --------- -------- Net cash used in investing activities.................. (125,074) (67,065) --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Change in long-term debt............................... 68,455 (13,642) Change in short-term debt ............................. 409 (668) Cash dividends paid.................................... (28,405) (24,716) Subsidiary dividends to minority stockholders.......... (1,841) Common stock purchased for the treasury................ (8,962) Stock incentive programs............................... 115 3,449 --------- -------- Net cash (used) provided by financing activities....... 29,771 (35,577) --------- -------- Effect of exchange rates on cash....................... (1,512) 1,078 --------- -------- Net decrease in cash................................... $ (497) $ 10,423 ========= ======== EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position and results of operation. It is management's opinion, however, that all material adjustments (consisting of normal recurring accruals) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended December 31, 1995. 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. EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SEPTEMBER 30, 1996, CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1996 SEP-30-1996 21,535 0 215,216 0 179,170 440,494 879,347 (315,217) 1,130,321 207,291 234,890 0 0 5,790 541,062 1,130,321 1,220,545 1,220,545 949,161 949,161 (5,018) 0 9,938 113,849 42,900 70,949 0 0 0 70,949 1.33 1.33
-----END PRIVACY-ENHANCED MESSAGE-----