-----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, AlWt2ewds7wtdFaW4qlS8m9HXQldUYXldY7mWGsn6Dr9eDJ7s/8RcFRxgfgXItmx HWpw2UDt05sq6dyyo6yFnQ== 0001047469-99-019544.txt : 19990513 0001047469-99-019544.hdr.sgml : 19990513 ACCESSION NUMBER: 0001047469-99-019544 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990512 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: SEC FILE NUMBER: 001-05277 FILM NUMBER: 99617708 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 OF THE SECURITIES EXCHANGE ACT OF 1934 For the Three Months Ended March 31, 1999 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. 52,311,314 shares of Common Stock, $.10 par value, on April 27, 1999. 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, 1999. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net sales for the first quarter of 1999 were $450.6 million compared to $451.5 million for the first quarter of 1998, a decrease of 0.2 percent or $0.9 million. Net income was $18.5 million, or $0.35 per share, for the first quarter of 1999 compared to $21.9 million, or $0.41 per share, for the same quarter in 1998, a decrease of 15.7 percent. The flat net sales comparison is due to significantly lower raw material prices which resulted in lower selling prices for many flexible packaging products. Within flexible packaging, net sales of high barrier products increased $3.5 million, or 2.0 percent, while net sales declined $2.5 million for polyethylene packaging products and $1.1 million for paper products, or 2.2 percent and 2.3 percent, respectively. Net sales in the pressure sensitive materials business declined $0.7 million or 0.6 percent. Net income for the first quarter of 1999 was adversely affected by approximately $0.08 per share of losses related to the Company's flexible packaging joint venture in Brazil, with $0.04 per share of the loss due to the January devaluation of the Brazilian currency, $.02 per share due to manufacturing relocation and reorganization costs, and $.02 per share in operating losses due to a weak economic environment in the region. Excluding the financial impact of the Brazilian joint venture, results in flexible packaging were strong with operating profit up 11.6 percent over the first quarter of last year. In pressure sensitive materials, operating profit declined 13.1 percent due to costs associated with the reorganization of that business and a slightly less favorable sales mix. The $0.4 million decrease in research and development expense occurred in the pressure sensitive materials business segment. The adverse experience of the Company's flexible packaging joint venture in Brazil account for nearly all of the change in other cost (income), net, at March 31, 1999, compared to the same 1998 period. The effective tax rate for the first quarter of 1999 and 1998 was 39.2 percent and 38.8 percent, respectively. EUROPEAN COMMON CURRENCY (EURO) The European Economic and Monetary Union (EMU) and a new currency, the "euro", began in Europe on January 1, 1999. This is a significant and critical element in the European Union's (EU) plan to blend the economies of the EU's member states into one integrated market, with unrestricted and unencumbered trade and commerce across borders. Eleven of the fifteen member EU countries are initially participating. Other member states may join in the years to come. - 2 - On January 1, 1999, the European Central Bank (ECB) established fixed conversion rates between the euro and existing currencies (legacy currencies) of participating member countries of the EMU. The euro now trades on currency exchanges and is available for noncash transactions on a "no compulsion, no prohibition" basis. The euro will coexist with the legacy currencies through January 1, 2002. During this transition period, currency conversion rates no longer will be computed directly from one legacy currency to another. Instead, a "triangulation" process must be applied with any amount denominated in a legacy currency first converted into a euro amount and then into the second legacy currency. Beginning on January 1, 2002, the ECB will issue euro-denominated bills and coins for use in cash transactions. On or before July 1, 2002, the participating countries will withdraw all legacy bills and coins and use the euro as their legal currency. The principal impact on the Company will be experienced by its operations whose functional currency is the existing currency (legacy currency) of a participating member country of the EMU. The "triangulation" process and the resulting single currency denomination (the euro) will impact the information technology infrastructure, accounting record keeping requirements, and cross-border purchasing and selling. The Company recognizes that failure to timely resolve internal euro issues could result, in a worst case, in the Company's European operations' inability to obtain raw materials in a timely manner; reductions, delays, or cancellations of customer orders; delays in payments by customers for products shipped; or a general inability to record, track, and consummate business transactions. Any or all of these events could have a material adverse effect on the Company's business, financial condition, and results of operations. The Company has selected and installed new computer software which is euro-compliant (also Year 2000 compliant) and expects that the initial positive experience during the first quarter of 1999 will continue as actual utilization of the new software more fully tests its functionality over a longer period of time. The cost of these efforts is expected to total $1.5 million of which approximately $1.0 million was incurred in 1998 and $0.2 million in 1999 for both expense and capital items. The overall effect on the Company's international operations, principally its Pressure Sensitive Materials business segment, is not expected to be material. In addition, the increased "price and cost transparency" expected to result from a single currency for a larger integrated market, is expected to lower material cost and lower costs associated with currency transactions, however, selling prices may be adversely affected. The experience during the first quarter of 1999 has not been out of the ordinary and the Company expects this transition experience to continue. YEAR 2000 ISSUE In late-1992, the Company began to set direction for upgrading all of its information technology (IT) systems with a focus on significant enhancement of IT support at the division level. It was the Company's intention to replace legacy IT systems with hardware and software that reflected the current state of technology. Principal objectives of this major effort were to significantly improve the quality and usefulness of computerized information management systems, to improve employee and manufacturing efficiencies, and to notably enhance the quality of service to customers, suppliers, and employees. "Year 2000 compliant," was one of many necessary attributes of any system considered. Computers and related equipment, computer software, and other office and manufacturing equipment utilizing microprocessors that use only two digits to identify a year in a date field may be - 3 - unable to accurately process certain date-based information at or after the Year 2000. This is commonly referred to as the "Year 2000 issue." The Company, like commerce in general, is highly dependent on computerized systems or controls for the administrative recording of business transactions, for the administrative control and actual manufacture of products it sells, and for the efficient interaction between third parties such as suppliers, customers, banks, and employees. The Company recognizes that failure to timely resolve internal Year 2000 issues could result, in a worst case, in the Company's inability to obtain raw materials in a timely manner; reductions in the quality or quantity of materials obtained; reductions, delays, or cancellations of customer orders; delays in payments by customers for products shipped; or a general inability to record, track, and consummate business transactions. Any or all of these events could have a material adverse effect on the Company's business, financial condition, and results of operations. The Company is addressing its Year 2000 issue in three areas: (1) IT system applications, (2) non-IT systems, including engineering and manufacturing equipment applications, and (3) relationships with third parties. The Company has conducted an assessment of its company-wide Year 2000 issue surrounding its IT systems. Since the initial assessment in late-1992, concurrent efforts have been underway to evaluate, select, and implement third party supplied or internally developed software for company-wide or division-wide applications. Currently, a significant portion of all new major software applications is in daily operation. Internally developed software is Year 2000 compliant, and where third party supplied software is not Year 2000 compliant the Company has received assurance of such compliance once the updated software version is released and installed in 1999. While the current stages of completion for these concurrent efforts vary, the Company believes that implementation will be substantially complete and Year 2000 compliant by mid-1999 with potentially two to four sites requiring third quarter efforts to become Year 2000 compliant. The Company has completed the initial assessment of the Year 2000 issue surrounding its non-IT systems, including engineering and manufacturing equipment applications. Year 2000 remediation and testing efforts, which are continuing throughout the Company, are more than 75 percent complete. This Company-wide effort is being centrally coordinated with actual assessment, remediation, and implementation assigned to identified individuals at each manufacturing, warehouse, or office site. While the degree of effort and extensiveness of remediation will vary by site, it is expected that all sites will be Year 2000 compliant by mid-1999. Finally, the Company is continuing to examine its relationship with third parties whose failure to become Year 2000 compliant in a timely manner, if at all, could have a material effect on the Company. The Company has been in contact with significant vendors and customers with respect to such companies' Year 2000 compliance programs and status. In addition, follow-up conversations have been conducted with key customers and vendors. The Company is continuing to evaluate this effort and expects to request more detailed and updated information from its principal suppliers and customers over the next several months. The Company is developing contingency plans to address the effects of the failure of the - 4 - Company or any of its principal suppliers, customers, or other third parties to become Year 2000 compliant in a timely manner. While the initial contingency plan development is expected to be completed during the second quarter of 1999, it is expected that this plan will be updated throughout 1999 as required by changes in events, facts, and circumstances surrounding the Company's Year 2000 compliance efforts as well as that of its principal suppliers, customers, and other third parties. Most business units meet at least monthly to review progress and plans. Senior level representatives from the various concurrent implementation and remediation teams meet at least quarterly with senior level Company management to assess progress, to assure a coordinated effort where required, and to verify a continued Company-wide focus toward a satisfactory resolution of the Company's Year 2000 issue. The Company is utilizing both internal and external resources to meet its timetable for becoming Year 2000 compliant. Since late-1992, when the Company began to set direction for upgrading all of its IT systems in the normal course of business, the Company has made capital investments in certain third party software and hardware systems to address the financial and operational needs of the business. These systems, which will improve the efficiencies and productivity of the replaced systems, have been, or will be certified Year 2000 compliant by the vendors and have been or will be substantially installed and operational by mid-1999. To date all of these capital projects were part of the Company's long term strategic capital plan and their timing was not accelerated as a result of the Year 2000 issue. Total expenditures for the remediation of "embedded chip exposures" in manufacturing equipment and facilities together with the unexpected replacement of selected computer equipment is estimated to total $2.6 million, of which approximately $0.3 million has been incurred in 1998 and $0.8 million in 1999. This effort is expected to be substantially completed by mid-1999. All expenditures are made from internally generated funds and have not had a negative impact on the Company's capital expenditure program. FORWARD-LOOKING STATEMENTS The following "Safe Harbor Statement" is made pursuant to the Private Securities Litigation Reform Act of 1995. Certain of the statements contained in the body of this report are forward-looking statements (rather than historical facts). With respect to such forward-looking statements, the Company seeks the protections afforded by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current plans and expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in such statements. These forward-looking statements include, but are not limited to, the following: the successful reorganization of the pressure sensitive materials segments; the expectation that packaging operations will remain strong in 1999; the success of the Company in expanding its international business; the amount and distribution of expected capital expenditures in 1999; the expectation that total debt will decrease slightly in 1999; the cost and success of the Company's Year 2000 compliance program and euro conversion program; and the opinion of management that resolution of the Company's current environmental litigation will not produce a material adverse effect on its financial condition or results of operations. Factors that could cause actual results to differ from those expected include, but are not limited - 5 - to, general economic conditions such as inflation, interest rates, and foreign currency exchange rates; competitive conditions within the Company's markets, including the acceptance of new and existing products offered by the Company; price increases for raw materials and the ability of the Company to pass these price increases on to its customers or otherwise manage commodity price fluctuation risks; the presence of adequate cash available for investment in the Company's business in order to maintain desired debt levels; unanticipated consequences of the Year 2000, including noncompliance by the Company's customers or suppliers; unanticipated consequences of the EMU's conversion to the euro; changes in governmental regulation, especially in the areas of environmental, health and safety matters, and foreign investment; unexpected outcomes in the Company's current and future litigation proceedings; and changes in the Company's labor relations. FINANCIAL CONDITION A statement of cash flow for the three months ended March 31, 1999, is as follows:
Millions ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income .............................................. $ 18.5 Non-cash items: Depreciation and amortization ....................... 25.6 Minority interest ................................... 1.0 Deferred income taxes, non-current portion .......... 1.6 Net increase in working capital ..................... (19.2) Net change in deferred charges and credits .......... 2.0 Undistributed earnings of affiliated companies ...... 6.3 ------- Net cash provided by operating activities .................. 35.8 ------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment ..................... (29.8) Business acquisition .................................... (1.4) Other ................................................... 0.1 ------- Net cash used in investing activities ...................... (31.1) ------- CASH FLOWS FROM FINANCING ACTIVITIES: Change in debt .......................................... 10.4 Cash dividends paid ..................................... (12.0) ------- Net cash provided by financing activities .................. (1.6) ------- Effect of exchange rates ................................... (1.0) ------- Net increase in cash ....................................... $ 2.1 ------- -------
- 6 - ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are filed as part of the report: 3(a) Restated Articles of Incorporation of the Registrant, as amended. (1) 3(b) By-Laws of the Registrant, as amended through July 7, 1992. (2) 3(c) Amendment to the By-Laws of the Registrant dated October 29, 1998. (3) 4(a) Rights Agreement, dated as of August 3, 1989, between the Registrant and Norwest Bank Minnesota, National Association. (4) 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. * (6) 10(b) Bemis Company, Inc. 1994 Stock Incentive Plan. * (7) 10(c) Bemis Company, Inc. 1984 Stock Award Plan. * (2) 10(d) Bemis Retirement Plan, as amended effective January 1, 1994. * (2) 10(e) Bemis Company, Inc. Supplemental Retirement Plan dated October 20, 1988. * (2) 10(f) Bemis Executive Incentive Plan dated April 1, 1990. * (2) 10(g) Bemis Company, Inc. Long Term Deferred Compensation Plan. * (2) 10(h) Bemis Company, Inc. 1997 Executive Officer Performance Plan. * (1) 10(i) 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. (2) 19 Reports Furnished to Security Holders. 27 Financial Data Schedule (EDGAR electronic filing only). - 7 - ------------- * 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 Definitive Proxy Statement filed with the Securities and Exchange Commission on March 18, 1997 (File No. 1-5277). (2) 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). (3) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-5277). (4) Incorporated by reference to the Registrant's Registration Statement on Form 8-A dated August 4, 1989 (File No. 0-1387). (5) Incorporated by reference to the Registrant's Current Report on Form 8-K dated June 30, 1995 (File No. 1-5277). (6) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (File No. 33-50560). (7) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (File No. 33-80666). (b) There were no reports on Form 8-K filed during the first quarter ended March 31, 1999. 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 10, 1999 /s/Gene C. Wulf ---------------------- ----------------------------- Gene C. Wulf, Vice President and Controller Date May 10, 1999 /s/Benjamin R. Field, III ---------------------- ----------------------------- Benjamin R. Field, III, Senior Vice President, Chief Financial Officer and Treasurer - 8 - EXHIBIT INDEX
EXHIBIT DESCRIPTION FORM OF FILING - ------- ----------- -------------- 3(a) Restated Articles of Incorporation of the Registrant, as amended. (1) 3(b) By-Laws of the Registrant, as amended through July 7, 1992. (2) 3(c) Amendment to the By-Laws of the Registrant dated October 29, 1998. (3) 4(a) Rights Agreement, dated as of August 3, 1989, between the Registrant and Norwest Bank Minnesota, National Association. (4) 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. * (6) 10(b) Bemis Company, Inc. 1994 Stock Incentive Plan. * (7) 10(c) Bemis Company, Inc. 1984 Stock Award Plan. * (2) 10(d) Bemis Retirement Plan, as amended effective January 1, 1994. * (2) 10(e) Bemis Company, Inc. Supplemental Retirement Plan dated October 20, 1988. * (2) 10(f) Bemis Executive Incentive Plan dated April 1, 1990. * (2) 10(g) Bemis Company, Inc. Long Term Deferred Compensation Plan. * (2) 10(h) Bemis Company, Inc. 1997 Executive Officer Performance Plan. * (1) 10(i) 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. (2) 19 Reports Furnished to Security Holders. Electronic/EDGAR 27 Financial Data Schedule (EDGAR electronic filing only). Electronic/EDGAR
------------- * 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 Definitive Proxy Statement filed with the Securities and Exchange Commission on March 18, 1997 (File No. 1-5277). (2) 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). (3) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-5277). (4) Incorporated by reference to the Registrant's Registration Statement on Form 8-A dated August 4, 1989 (File No. 0-1387). (5) Incorporated by reference to the Registrant's Current Report on Form 8-K dated June 30, 1995 (File No. 1-5277). (6) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (File No. 33-50560). (7) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (File No. 33-80666). - 9 - EX-19 2 EXHIBIT 19 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 March 31 ---------------------- 1999 1998 ---- ---- Net sales ............................................. $ 450,607 $ 451,491 Costs and expenses: Cost of products sold ............................ 354,564 360,652 Selling, general, and administrative expenses .... 50,849 46,628 Research and development ......................... 2,503 2,908 Interest expense ................................. 5,144 5,240 Other (income) costs, net ........................ 6,171 (753) Minority interest in net income .................. 982 988 --------- --------- Income before income taxes ............................ 30,394 35,828 Taxes based on income - cash ..................... 10,291 12,950 Taxes based on income - deferred ................. 1,609 950 --------- --------- Net income ............................................ $ 18,494 $ 21,928 --------- --------- --------- --------- Basic earnings per share of common stock .............. $ .35 $ .41 --------- --------- --------- --------- Diluted earnings per share of common stock ............ $ .35 $ .41 --------- --------- --------- --------- Cash dividends paid ................................... $ .23 $ .22 --------- --------- --------- --------- Average common shares and common stock equivalents outstanding ...................... 52,568 53,654 --------- --------- --------- ---------
EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN THOUSANDS OF DOLLARS)
Mar 31 Dec 31 ASSETS 1999 1998 ---- ---- Cash ......................................................................... $ 25,858 $ 23,738 Accounts receivable - net .................................................... 245,163 246,676 Inventories .................................................................. 222,305 212,613 Prepaid expenses and deferred charges ........................................ 35,944 34,912 ----------- ----------- Total current assets ............................................ 529,270 517,939 ----------- ----------- Property and equipment, net .................................................. 743,141 740,101 ----------- ----------- Excess of cost of investments in subsidiaries over net assets acquired ..................................... 159,567 160,819 Other assets ................................................................. 16,319 34,195 ----------- ----------- Total .......................................................... 175,886 195,014 ----------- ----------- TOTAL ASSETS ................................................................. $ 1,448,297 $ 1,453,054 ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt ............................................ $ 2,799 $ 2,946 Short-term borrowings ........................................................ 2,928 3,553 Accounts payable ............................................................. 180,339 193,088 Accrued salaries and wages ................................................... 26,505 31,629 Accrued income and other taxes ............................................... 20,235 11,572 ----------- ----------- Total current liabilities ...................................... 232,806 242,788 Long-term debt, less current portion ......................................... 382,215 371,363 Deferred taxes ............................................................... 77,649 76,204 Other liabilities and deferred credits ....................................... 56,471 54,655 ----------- ----------- Total liabilities .............................................. 749,141 745,010 ----------- ----------- Minority interest ............................................................ 36,556 37,237 ----------- ----------- STOCKHOLDERS' EQUITY: Common stock (59,098,203 and 59,056,047 shares) .......................... 5,910 5,906 Capital in excess of par value ........................................... 181,957 181,908 Retained income .......................................................... 697,777 691,315 Other comprehensive income (loss) ........................................ (20,838) (6,116) Common stock held in treasury (6,786,889 and 6,786,889 shares) ........... (202,206) (202,206) ----------- ----------- Total stockholders' equity ..................................... 662,600 670,807 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................................... $1,448,297 $ 1,453,054 ----------- ----------- ----------- -----------
EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY PERIODS PRIOR TO 1998 HAVE BEEN REVISED TO REFLECT PROVISIONS OF SFAS NO. 130
Capital In Other Common Total Common Excess Of Retained Comprehensive Stock Held Stockholder's (IN THOUSANDS OF DOLLARS) Stock Par Value Income Income (Loss) In Treasury Equity - ----------------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1995 $5,781 $147,119 $498,167 $ 8,590 ($146,849) $ 512,808 -------------------------------------------------------------------- Net income for 1996 101,081 101,081 Translation adjustment for 1996 (3,917) (3,917) Pension liability adjustment, net of $948 tax benefit 1,546 1,546 --------- Total comprehensive income 98,710 --------- Cash dividends paid on common stock, $. 72 per share (37,830) (37,830) Stock incentive programs and related tax effects 2 310 312 Common stock transactions related to an acquisition of a subsidiary company 7 2,052 2,059 Purchase of 292,000 shares of common stock (8,962) (8,962) -------------------------------------------------------------------- Balance at December 31, 1996 $5,790 $149,481 $561,418 $ 6,219 ($155,811) $ 567,097 -------------------------------------------------------------------- Net income for 1997 107,584 107,584 Translation adjustment for 1997 (11,109) (11,109) Pension liability adjustment, net of $842 tax benefit (1,373) (1,373) --------- Total comprehensive income 95,102 --------- Cash dividends paid on common stock, $.80 per share (42,418) (42,418) Stock incentive programs and related tax effects 4 47 51 Common stock transactions related to an acquisition of a subsidiary company 70 25,034 25,104 Purchase of 139,429 shares of common stock (5,051) (5,051) -------------------------------------------------------------------- Balance at December 31, 1997 $5,864 $174,562 $626,584 ($ 6,263) ($160,862) $ 639,885 -------------------------------------------------------------------- Net income for 1998 111,432 111,432 Translation adjustment for 1998 (72) (72) Pension liability adjustment, net of $102 tax benefit 219 219 --------- Total comprehensive income 111,579 --------- Cash dividends paid on common stock, $.88 per share (46,701) (46,701) Stock incentive programs and related tax effects 42 7,346 7,388 Purchase of 1,110,843 shares of common stock (41,344) (41,344) -------------------------------------------------------------------- Balance at December 31, 1998 $5,906 $181,908 $691,315 ($ 6,116) ($202,206) $ 670,807 -------------------------------------------------------------------- Net income for first three months of 1999 18,494 18,494 Translation adjustment for first three months of 1999 (14,722) (14,722) --------- Total comprehensive income 3,772 --------- Cash dividends paid on common stock, $.23 per share (12,032) (12,032) Stock incentive programs and related tax effects 4 49 53 -------------------------------------------------------------------- Balance at March 31, 1999 $5,910 $181,957 $697,777 ($ 20,838) ($202,206) $ 662,600 -------------------------------------------------------------------- --------------------------------------------------------------------
EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS OF DOLLARS)
Three Months Ended March 31 ------------------------- 1999 1998 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income ............................................ $ 18,494 $ 21,928 NON-CASH ITEMS: Depreciation and amortization ..................... 25,613 22,903 Minority interest in net income ................... 982 988 Deferred income taxes, non-current portion ........ 1,609 948 Undistributed earnings of affiliated companies .... 6,314 (422) (Gain) Loss on sale of property and equipment ..... (13) (22) -------- -------- Cash provided by operations ........................... 52,999 46,323 Changes in working capital, net of effects of acquisitions and dispositions ................... (19,173) (13,914) Net change in deferred charges and credits ............ 1,998 (569) -------- -------- Net cash provided (used) by operating activities ...... 35,824 31,840 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment ................... (29,833) (45,184) Business acquisitions ................................. (1,424) (38,868) Proceeds from sale of property and equipment .......... 139 374 Other ................................................. (3) 4 -------- -------- Net cash used in investing activities ................. (31,121) (83,674) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Change in long-term debt excluding debt assumed in business acquisition ..................... 11,009 67,733 Change in short-term debt ............................. (608) (16) Cash dividends paid ................................... (12,032) (11,744) Subsidiary dividends to minority stockholders ......... (1,835) Stock incentive programs and related tax effects ...... 53 7,388 -------- -------- Net cash provided by financing activities ............. (1,578) 61,526 -------- -------- Effect of exchange rates on cash ...................... (1,005) (115) -------- -------- Net increase in cash .................................. $ 2,120 $ 9,577 -------- -------- -------- --------
EXHIBIT 19 - FINANCIAL STATEMENTS FURNISHED TO SECURITY HOLDERS BEMIS COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEGMENTS OF BUSINESS The Registrant's business activities are organized around its two principal business segments, Flexible Packaging and Pressure Sensitive Materials. Both internal and external reporting conform to this organizational structure with no significant differences in accounting policies applied. The Registrant evaluates the performance of its segments and allocates resources to them based on operating profit which is defined as profit before general corporate expense, interest expense, income taxes, and minority interest. A summary of the Registrant's business activities reported by its two business segments follows:
For the Quarter Ended March 31, ----------------------------- Business Segments (in millions of dollars) 1999 1998 - ------------------------------------------------------------------------------- Net Sales to Unaffiliated Customers: Flexible Packaging $ 333.6 $ 333.7 Pressure Sensitive Materials 117.1 118.0 Intersegment Sales: Flexible Packaging (0.1) (0.1) Pressure Sensitive Materials (0.0) (0.1) ---------- ---------- Total $ 450.6 $ 451.5 ---------- ---------- ---------- ---------- Operating Profit and Pretax Profit: Flexible Packaging $ 30.2 $ 33.2 Pressure Sensitive Materials 11.2 12.9 ---------- ---------- Total operating profit 41.4 46.1 General corporate expenses (4.9) (4.0) Interest expense (5.1) (5.3) Minority interest in net income (1.0) (1.0) ---------- ---------- Income before income taxes $ 30.4 $ 35.8 ---------- ---------- ---------- ---------- Identifiable Assets: Flexible Packaging $ 1,107.6 $ 1,078.5 Pressure Sensitive Materials 291.0 293.9 ---------- ---------- Total identifiable assets 1,398.6 1,372.4 Corporate assets 49.7 50.1 ---------- ---------- Total $ 1,448.3 $ 1,422.5 ---------- ---------- ---------- ----------
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, 1998. TAXES BASED ON INCOME The Company's 1999 effective tax rate of 39% 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 MARCH 31, 1999, CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 25,858 0 245,163 0 222,305 529,270 1,158,163 415,022 1,448,297 232,806 382,215 0 0 5,910 656,690 1,448,297 450,607 450,607 354,564 354,564 6,171 0 5,144 30,394 11,900 18,494 0 0 0 18,494 .35 .35
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