10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  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, 2001

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 incorporation or organization)	(IRS Employer 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 ý                    NO  o

                Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

52,795,566 shares of Common Stock, $.10 par value, on November 7, 2001

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                The financial statements, enclosed as Exhibit 19, are incorporated by reference into this Form 10-Q.  In the opinion of management, the financial statements reflect all adjustments (all of which are normal and recurring) necessary to a fair statement of the results for the nine months ended September 30, 2001.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations - Third Quarter 2001

                Net sales for the third quarter of 2001 were $575.6 million compared to $542.8 million for the third quarter of 2000, an increase of 6.0 percent or $32.8 million.  Net income was $36.1 million for the third quarter of 2001 compared to $32.2 million for the same quarter in 2000, an increase of 12.1 percent.  Diluted earnings per share for the third quarter of 2001 and 2000 were $0.68 and $0.60, respectively.

On September 7, 2001, the Company acquired all of the outstanding shares of Duralam, Inc.  Results of operation subsequent to September 7, 2001, are included and are based upon the preliminary allocation of the purchase cost to assets acquired. The quarter’s operating results benefited from strong results from the year 2000 business acquisitions, as well as the recent acquisition of Duralam, Inc., and improved manufacturing efficiencies resulting from manufacturing equipment installed in recent years.  Third quarter 2001 net sales includes non-comparable net sales totaling $40.7 million derived from business acquisitions made during the third quarters of 2000 and 2001, of which $28.9 million benefited the flexible packaging business segment.

                The strong sales performance for the current quarter was paced by the flexible packaging business segment, which reported an 8.6 percent increase in net sales and 30.2 percent growth in operating profit.  Within flexible packaging, high barrier products and polyethylene products led the net sales growth with increases of $27.7 million or 12.3 percent and $6.4 million or 4.4 percent, respectively.  Net sales in paper products also increased $1.8 million or 3.7 percent over the same period last year.

                The pressure sensitive materials business segment reported a 2.7 percent decrease in net sales and 69.9 percent decrease in operating profit. Since the third quarter of 2000 when signs of a weakening economy first became apparent, growing industry overcapacity and competition for market share have had a significant impact on this business segment.  Although steps continue to be taken to reduce overhead costs and improve manufacturing efficiencies, substantial margin improvement is not expected until the economy begins to strengthen.

                The effective lower average interest rate is the principal cause of the $1.2 million decrease in interest expense over the same quarter of 2000.  Foreign currency exchange losses together with losses associated with the Company’s flexible packaging joint venture in Brazil account for nearly all of the unfavorable third quarter 2001 change in other costs (income), net, compared to the same 2000 period.

Results of Operations - Nine Months Ended September 30, 2001

                Net sales for the nine-month period of 2001 were $1.73 billion compared to $1.59 billion for the same period in 2000, an increase of 8.9 percent.  Net income was $101.2 million for 2001 compared to $97.2 million for the same nine-month period in 2000, an increase of 4.2 percent.  Non-comparable net sales for the nine-month period of 2001 include $155.8 million derived from business acquisitions made during the third quarters of 2000 and 2001, of which $115.5 million benefited the flexible packaging business segment.

                Net sales for flexible packaging operations increased 12.4 percent while operating profit increased 29.0 percent reflecting continued positive performance by both high barrier products and polyethylene products.

                Net sales for pressure sensitive materials decreased 2.3 percent while operating profit decreased 79.9 percent reflecting the continuation of the extremely competitive market conditions for this business segment in North America.

                The $0.8 million increase in research and development expense occurred in the flexible packaging business segment.  Increased debt levels experienced principally during the third quarter of 2000 associated with business unit acquisitions, partially offset by lower interest rates, account for the $5.7 million increase in interest expense.  During August 2001, the Company completed a $250.0 million debt offering, the proceeds of which were used to reduce outstanding commercial paper debt.  The unfavorable comparison of other cost (income) is due to losses associated with the Company’s flexible packaging joint venture in Brazil and foreign currency exchange losses partially offset by the gain on the first quarter 2001 sale of an idle paper packaging manufacturing site.  The effective tax rates for the first nine months of 2001 and 2000 were 38.3 percent and 38.0 percent, respectively.

New Accounting Pronouncements

                In July 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141, “Business Combinations” and SFAS No. 142 “Goodwill and Other Intangible Assets”.  SFAS No. 141 requires that the purchase method be used for business combinations initiated after June 30, 2001.  SFAS No. 142 requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment.  The provisions of SFAS No. 142 are effective for fiscal years beginning after December 15, 2001, and any business combination initiated after June 30, 2001.  In January of 2002, the Company will adopt the reporting requirements of SFAS No. 142 and has applied its requirements to the purchase of Duralam, Inc. which was accomplished September 7, 2001.  Based upon the Company’s current understanding of the standard and a preliminary assessment of recorded goodwill and intangible assets, had the standard been in effect January 1, 2001, the Company estimates that the full year 2001 impact would have been approximately $0.16 of additional diluted earnings per share.

                Effective January 1, 2001, the Company adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 138.  This new accounting standard requires that all derivative instruments be recorded on the balance sheet at fair value and establishes criteria for designation and effectiveness of hedging relationships.  The effect of adopting this standard was not material to the Company’s consolidated financial statements.  Upon adoption, the Company recorded the immaterial impact as interest expense.

Forward-Looking Statements

                This Quarterly Report on Form 10-Q may contain certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995, and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934.  The words “believe”, “expect”, “anticipate”, “intend”, “estimate”, “target”, “may”, “will”, “plan”, “project”, “should”, “continue”, or the negative thereof or other expressions, which are predictions of or indicate future events and trends and which do not relate to historical matters, identify forward-looking statements.  Such statements are based on information available to management as of the time of such statements and relate to, among other things, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, and statements regarding the Company’s mission and vision.  Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievements of the Company to differ materially from anticipated future results, performance, or achievements expressed or implied by such forward-looking statements.  The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

                Factors that could cause actual results to differ from those expected include, but are not limited to, general economic conditions such as inflation, interest rates, and foreign currency exchange rates; results from acquisitions may differ from what the Company anticipated; competitive conditions within the Company’s markets, including the acceptance of new and existing products offered by the Company; price changes for raw materials and the ability of the Company to pass these price changes 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 European Monetary Union’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.  These and other risks, uncertainties, and assumptions identified from time to time  in  the Company’s  filings with  the Securities  and  Exchange Commission, including without limitation, its Annual Report on Form 10-K and its quarterly reports on Form 10-Q, could cause the Company’s actual future results to differ materially from those projected in the forward-looking statements as a result of the factors set forth in the Company’s various filings with the Securities and Exchange Commission and of changes in general economic conditions and changes in the assumptions used in making such forward-looking statements.

Financial Condition

                Net cash provided by operating activities for the first nine months of 2001 was $224.4 million of which net income and depreciation and amortization were the principal sources.  Investing activities used net cash totaling $163.6 million which included $91.6 million for additions to property and equipment and $72.6 million for business unit acquisitions.  Financing activities used an additional $56.5 million principally for shareholder dividends and debt reduction.  Total capital additions for 2001 are expected to be approximately $120.0 million and total debt is expected to continue its downward trend for the balance of the year.  At September 30, 2001, debt totaled $668.9 million resulting in a total debt to total capital ratio of 40.7 percent.

                A statement of cash flow for the nine months ended September 30, 2001, is as follows:

	Millions
Cash flows from operating activities:
Net income	$	101.2
Non-cash items:
Depreciation and amortization	94.8
Minority interest	0.4
Deferred income taxes, non-current portion	6.9
Losses of unconsolidated affiliated companies	2.6
Net change in working capital items, net of effects of acquisitions	21.3
Net change in deferred charges and credits	(4.7		)
Other	1.9
Net cash provided by operating activities	224.4
Cash flows from investing activities:
Additions to property and equipment	(91.6		)
Business acquisitions	(72.6		)
Proceeds from sales of property and equipment	0.6
Net cash used in investing activities	(163.6		)
Cash flows from financing activities:
Change in debt	(14.3		)
Cash dividends paid                                                                                 .	(39.6		)
Common stock purchased for the treasury	(1.2		)
Stock incentive programs	(1.4		)
Net cash used by financing activities	(56.5		)
Effect of exchange rates on cash	1.0
Net increase in cash	5.3
Cash balance at beginning of year	28.9
Cash balance at end of period	$	34.2

Explanation of Terms Describing the Registrant’s Products

High Barrier Products – A grouping of Bemis products that provide protection and extend the shelf life of the contents of the package.  These products provide this protection by combining different types of plastics and chemicals into a multilayered plastic package.  These products provide barriers for such things as oxygen, moisture, sunlight, odor, or other elements.

Flexible polymer film – A non-rigid plastic film.

Barrier laminate – A multilayer plastic film made by laminating two or more films together with the use of glue or a molten plastic to achieve a barrier for the planned package contents.

Controlled atmosphere packaging – A package which limits the flow of elements, such as oxygen or moisture, into or out of the package.

Modified atmosphere packaging – A package in which the atmosphere inside the package has been modified by a gas such as nitrogen.

Blown film – A plastic film that is extruded through a round die in the form of a tube and then expanded by a column of air in the manufacturing process.

Cast film – A plastic film that is extruded through a straight slot die as a flat sheet during its manufacturing process.

Stretch film – A plastic film used to wrap pallets in the shipping process, which has significant ability to stretch.

Thermoformed plastic packaging – A package formed by applying heat to a film to shape it into a tray or cavity and then placing a flat film on top of the package after it has been filled.

Monolayer film – A single layer extruded plastic film.

Coextruded film – A multiple layer extruded plastic film.

Rotogravure printing – A high quality, long run printing process utilizing a metal cylinder.

Flexographic printing – The most common flexible packaging printing process in North America using a raised rubber or alternative material image mounted on a printing cylinder.

Multiwall paper bag – A package made from two or more layers of paper.

In-line overlaminating capability – The ability to add a protective coating to a printed material during the printing process.

Pressure sensitive material – A material with adhesive such that upon contact with another material it will stick.

Sheet products – Pressure sensitive materials cut into sheets and sold in sheet form.

Roll label products – Pressure sensitive materials made up and sold in roll form.

Technical products – Technically engineered pressure sensitive materials used primarily for fastening and mounting functions.

Graphic films – Pressure sensitive materials used for decorative signage, promotional items, and displays and advertisements.  May be either transparent or translucent.

UV inhibitors – Chemicals which protect against ultraviolet rays.

PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

 (a)          The following exhibits are filed as part of the report:

2	Purchase Agreement between the Registrant and Viskase Companies, Inc., and the Viskase-related companies listed therein, dated July 7, 2000. (1)
2(a)	Amendment No. 1 to Purchase Agreement between the Registrant and Viskase Companies, Inc., and the Viskase-related companies listed therein, dated August 31, 2000. (2)
2(b)	Amendment No. 2 to Purchase Agreement between the Registrant and Viskase Companies, Inc., and the Viskase-related companies listed therein, dated as of May 18, 2001. (3)
3(a)	Restated Articles of Incorporation of the Registrant, as amended. (4)
3(b)	By-Laws of the Registrant, as amended through October 25, 2001.
4(a)	Rights Agreement, dated as of July 29, 1999, between the Registrant and Wells Fargo Bank Minnesota, National Association (formerly known as Norwest Bank Minnesota, National Association). (5)
4(b)	Form of Indenture dated as of June 15, 1995, between the Registrant and U.S. Bank Trust National Association (formerly known as First Trust National Association), as Trustee. (6)
10(a)	Bemis Company, Inc. 1987 Amended and Restated Stock Option Plan as of October 29, 1999. * (7)
10(b)	Bemis Company, Inc. 1994 Stock Incentive Plan, Amended and Restated as of August 4, 1999. * (8)
10(c)	Bemis Company, Inc. Form of Management Contract with the Chief Executive Officer and other Executive Officers.* (7)
10(d)	Bemis Retirement Plan, Amended and Restated as of August 25, 2000.* (9)
10(e)	Bemis Company, Inc. Supplemental Retirement Plan, Amended and Restated as of December 31, 1999.* (9)
10(f)	Bemis Executive Officer Incentive Plan as of October 29, 1999.* (7)
10(g)	Bemis Company, Inc. Long Term Deferred Compensation Plan, Amended and Restated as of August 4, 1999.* (8)
10(h)	Bemis Company, Inc. 1997 Executive Officer Performance Plan. * (4)
10(i)	Fourth Amended and Restated Credit Agreement among the Registrant, the various financial institutions named therein and Morgan Guaranty Trust Company of New York, as Agent, originally dated as of August 1, 1986, Amended and Restated in Composite Copy as of August 2, 1999. (7)
10(j)	First Amendment, dated as of June 21, 2000, to the Fourth Amended and Restated Credit Agreement dated as of August 2, 1999, among the Registrant, the various financial institutions named therein and Morgan Guaranty Trust Company of New York, as Agent. (3)
10(k)	Bemis Company, Inc. 2001 Stock Incentive Plan.* (10)
10(l)	Bridge Credit Agreement, dated as of January 12, 2001, among the Registrant, the various financial institutions listed therein, and Morgan Guaranty Trust Company of New York, as Administrative Agent. (3)
10(m)	Letter Agreement, dated March 14, 2001, Re:  Addition of Bank Under Bridge Credit Agreement, among the Registrant, the various financial institutions listed therein, and Morgan Guaranty Trust Company of New York, as Administrative Agent. (3)
10(n)	First Amendment, dated as of August 7, 2001, to the Bridge Credit Agreement dated as of January 12, 2001, among the Registrant, the various financial institutions named therein, and Morgan Guaranty Trust Company of New York, as Administrative Agent. (11)
19	Reports Furnished to Security Holders.

*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-3 filed August 11, 2000 (File No. 333-43646).
(2)	Incorporated by reference to the Registrant’s Current Report on Form 8-K filed September 12, 2000 (File No. 1-5277).
(3)	Incorporated by reference to the Registrant’s Current Report on Form 8-K filed August 3, 2001 (File No. 1-5277).
(4)	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).
(5)	Incorporated by reference to Exhibit 1 to the Registrant’s Registration Statement on Form 8-A filed on August 4, 1999 (File No. 1-5277).
(6)	Incorporated by reference to the Registrant’s Current Report on Form  8-K dated June 30, 1995 (File No. 1-5277).
(7)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 (File No. 1-5277).
(8)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-5277).
(9)	Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-5277).
(10)	Incorporated by reference to Exhibit B to the Registrant’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 19, 2001 (File No. 1-5277).
(11)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 (File No. 1-5277).

(b)           Form 8-K, filed August 3, 2001, relating to the Company’s adoption of the 2001 Stock

                Incentive Plan, a short-term credit agreement, and computation of ratio of earnings to fixed

                charges for selected periods.

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 8, 2001	/s/ Gene C. Wulf
		Gene C. Wulf, Vice President and Controller
Date	November 8, 2001	/s/ Benjamin R. Field, III
		Benjamin R. Field, III, Senior Vice President, Chief Financial Officer and Treasurer

Exhibit Index

Exhibit	Description	Form of Filing
2	Purchase Agreement between the Registrant and Viskase Companies, Inc., and Viskase-related companies listed therein, dated July 7, 2000. (1)
2(a)	Amendment No. 1 to Purchase Agreement between the Registrant and Viskase Companies, Inc., and Viskase-related companies listed therein, dated August 31, 2000. (2)
2(b)	Amendment No. 2 to Purchase Agreement between the Registrant and Viskase Companies, Inc. and the Viskase-related companies listed therein, dated as of May 18, 2001. (3)
3(a)	Restated Articles of Incorporation of the Registrant, as amended.  (4)
3(b)	By-Laws of the Registrant, as amended through October 25, 2001.	Filed Electronically
4(a)	Rights Agreement, dated as of July 29, 1999, between the Registrant and Wells Fargo Bank Minnesota, National Association (formerly known as Norwest Bank Minnesota, National Association).  (5)
4(b)	Form of Indenture dated as of June 15, 1995, between the Registrant and U.S. Bank Trust National Association (formerly known as First Trust National Association), as Trustee.  (6)
10(a)	Bemis Company, Inc. 1987 Amended and Restated Stock Option Plan as of October 29, 1999. * (7)
10(b)	Bemis Company, Inc. 1994 Stock Incentive Plan, Amended and Restated as of August 4, 1999.  * (8)
10(c)	Bemis Company, Inc. Form of Management Contract with the Chief Executive Officer and other Executive Officers.  * (7)
10(d)	Bemis Retirement Plan, Amended and Restated as of August 25, 2000. * (9)
10(e)	Bemis Company, Inc. Supplemental Retirement Plan, Amended and Restated as of December 31, 1999.  * (9)
10(f)	Bemis Executive Officer Incentive Plan as of October 29, 1999.  * (7)
10(g)	Bemis Company, Inc. Long Term Deferred Compensation Plan, Amended and Restated as of August 4, 1999.  * (8)
10(h)	Bemis Company, Inc. 1997 Executive Officer Performance Plan.  * (4)
10(i)	Fourth Amended and Restated Credit Agreement among the Registrant, the various financial institutions named therein and Morgan Guaranty Trust Company of New York as Agent, originally dated as of August 1, 1986, Amended and Restated in Composite Copy as of August 2, 1999. (7)
10(j)	First Amendment, dated as of June 21, 2000, to the Fourth Amended and Restated Credit Agreement dated as of August 2, 1999, among the Registrant, the various financial institutions named therein and Morgan Guaranty Trust Company of New York, as Agent. (3)
10(k)	Bemis Company, Inc. 2001 Stock Incentive Plan.  * (10)
10(l)	Bridge Credit Agreement, dated as of January 12, 2001, among the Registrant, the various financial institutions listed therein, and Morgan
10(m)	Guaranty Trust Company of New York, as Administrative Agent. (3) Letter Agreement, dated March 14, 2001, Re:  Addition of Bank Under Bridge Credit Agreement, among the Registrant, the various financial institutions listed therein, and Morgan Guaranty Trust Company of New York, as Administrative Agent. (3)
10(n)	First amendment, dated as of August 7, 2001, to the Bridge Credit Agreement dated as of January 12, 2001, among the Registrant, the various financial institutions named therein, and Morgan Guaranty Trust Company of New York, as Administrative Agent. (11)
19	Reports Furnished to Securities Holders.	Filed Electronically

                *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 FormS-3 filed August 11, 2000 (File No. 333-43646).
(2)	Incorporated by reference to the Registrant’s Current Report on Form 8-K filed September 12, 2000 (File No. 1-5277).
(3)	Incorporated by reference to the Registrant’s Current Report on Form 8-K filed August 3, 2001 (File No. 1-5277).
(4)	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).
(5)	Incorporated by reference to Exhibit 1 to the Registrant’s Registration Statement on Form 8-A filed on August 4, 1999 (File No. 1-5277).
(6)	Incorporated by reference to the Registrant’s Current Report on Form 8-K dated June 30, 1995 (File No. 1-5277).
(7)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for  the quarter ended September 30, 1999 (File No. 1-5277).
(8)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 (File No. 1-5277).
(9)	Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-5277).
(10)	Incorporated by reference to Exhibit B to the Registrant’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 19, 2001 (File No. 1-5277).
(11)	Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 (File No. 1-5277).

EX-3.B

EXHIBIT 3(b)  -  EFFECTIVE OCTOBER 25, 2001

AMENDED BY-LAWS

OF

BEMIS COMPANY, INC.

                D.            ARTICLE I -- MEETINGS OF STOCKHOLDERS

1.             Place, Time and Conduct of Meetings

Meetings of stockholders shall be held at such place and time as the Board of Directors shall authorize.  The Board of Directors shall designate the person who shall chair meetings of stockholders.  Should the Board not so designate, the Chief Executive Officer, or his/her designee shall preside.  In the absence of the Chief Executive Officer the next Officer in the order of succession shall preside.  (See Article III, paragraph 1.)

2.             Annual Meeting

The Annual Meeting of the stockholders to elect Directors and to transact such other business as may properly come before the meeting, shall be held in the principal office of the Company in Minneapolis, Minnesota on the first Thursday in May or at such other time and place as may be selected by the Board of Directors.

3.             Special Meetings

Special meetings of the stockholders may be called by resolution of the Board of Directors.  The only business which can be conducted at a special meeting is that which has been set forth in the Notice of Meeting.

4.             Notice of Meeting

Notice of meeting, written or printed, for the Annual Meeting or any special meeting of stockholders, setting forth the purpose or purposes of the meeting, shall be mailed to the last known address of each stockholder not more than 70 days nor less than 10 days before any such meeting.

5.             Quorum

A quorum at any meeting of the stockholders shall consist of a majority of the shares entitled to vote represented in person or by proxy.  For purpose of determining whether shares are present at a meeting for quorum, or any other purpose, all shares that are represented by a proxy shall be deemed to be represented at the meeting.

6.             Election of Directors

The election of Directors shall be held at the Annual Meeting of Stockholders. The Officer presiding at the stockholders’ meeting shall appoint two suitable persons to act as inspectors of election.  They shall receive and canvass the votes cast and certify the result thereof to the presiding Officer.

7.             Vote

Except as otherwise required by statute, applicable rules or regulations, or by the Articles of Incorporation, a vote of the majority of the shares entitled to vote and represented at the meeting shall be necessary to decide any question that may properly come before the meeting.  To elect Directors each stockholder of record shall be entitled to cast one vote for each share of stock held.  There shall be no cumulative voting in the election of Directors

8.             Advance Notice of Nominations

Only persons who are nominated in accordance with the procedures set forth in this paragraph shall be eligible for election as Directors at stockholder meetings. Nominations of persons for election to the Board of Directors may be made at a meeting of stockholders (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Company entitled to vote for the election of Directors at the meeting who complies with the notice procedures set forth in this paragraph.

a.             Timing of Notice.  Nominations by stockholders shall be made pursuant to timely notice in writing to the Secretary of the Company.  To be timely, a stockholder’s notice of nominations to be made at an Annual Meeting of Stockholders must be delivered to, or mailed and received at, the principal executive offices of the Company not less than 90 days before the first anniversary of the date of the preceding year’s Annual Meeting of Stockholders.  If, however, the date of the Annual Meeting is more than 30 days before or after such anniversary date, notice by a stockholder shall be timely only if so delivered or so mailed and received not less than 90 days before such Annual Meeting or, if later, within 10 days after the first public announcement of the date of such Annual Meeting.  If a special meeting of stockholders of the Company is called in accordance with paragraph 3 of this Article I for the purpose of electing one or more Directors to the Board of Directors, for a stockholder’s notice to be timely it must be delivered to, or mailed and received at, the principal executive office of the Company not less than 90 days before such special meeting or, if later, within 10 days after the first public announcement of the date of such special meeting.  Except to the extent otherwise required by law, the adjournment of an annual or special meeting of stockholders shall not commence a new time period for the giving of a stockholder’s notice as described above.

b.             Content of Notice.  A stockholder’s notice of nomination for an annual or special meeting of stockholders shall set forth (x) as to each person whom the stockholder proposes to nominate for election or re–election as a Director:  (i) such person’s name, and (ii) all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors in an election contest, or is otherwise required, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and Rule 14a–11 promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); and (y) as to the stockholder giving the notice:  (i) the name and address, as they appear on the Company’s books, of such stockholder, and (ii) the class and number of shares of the Company that are beneficially owned by such stockholder.  At the request of the Board of Directors, any person nominated by the Board of Directors for election as a Director shall furnish to the Secretary of the Company the information required to be set forth in a stockholder’s notice of nomination that pertains to a nominee.

c.             Consequences of Failure to Give Timely Notice.  Notwithstanding anything in these By-Laws to the contrary, no person shall be eligible for election as a Director of the Company unless nominated in accordance with the procedures set forth in this paragraph.  The presiding Officer of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed in this paragraph and, if the presiding Officer should so determine, the presiding Officer shall so declare to the meeting, and the defective nomination shall be disregarded.

d.             Public Announcement.  For purposes of this paragraph “public announcement” means disclosure (i) when made in a press release reported by the Dow Jones News Service, Associated Press, or comparable national news service, (ii) when filed in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Securities Exchange Act of 1934, as amended, or (iii) when mailed as the notice of the meeting pursuant to paragraph 4 of this Article I.

9.             Advance Notice of Other Business

At any annual or special meeting of stockholders, only such business (other than the nomination and election of Directors) may be conducted as shall have been brought before the meeting (i) by or at the direction of the Board of Directors, or (ii) by any stockholder of the corporation entitled to vote at the meeting who complies with the notice procedures set forth in this paragraph.

a.             Timing of Notice.  For such business to be properly brought before any annual or special meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Company.  To be timely, a stockholder’s notice of any such business to be conducted at an Annual Meeting must be delivered to, or mailed and received at, the principal executive offices of the Company not less than 90 days before the first anniversary of the date of the preceding year’s Annual Meeting of Stockholders.  If, however, the date of the Annual Meeting is more than 30 days before or after such anniversary date, notice by a stockholder shall be timely only if so delivered or so mailed and received not less than 90 days before such Annual Meeting or, if later, within 10 days after the first public announcement of the date of such Annual Meeting.  If a special meeting of stockholders of the Company is called in accordance with paragraph 3 of this Article I for any purpose other than electing Directors to the Board of Directors, for a stockholder’s notice to be timely it must be delivered to, or mailed and received at, the principal executive office of the Company not less than 90 days before such special meeting or, if later, within 10 days after the first public announcement of the date of such special meeting.  Except to the extent otherwise required by law, the adjournment of an annual or special meeting of stockholders shall not commence a new time period for the giving of a stockholder’s notice as required above.

b.             Content of Notice.  A stockholder’s notice to the Company shall set forth as to each matter the stockholder proposes to bring before the annual or special meeting (w) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (x) the name and address, as they appear on the Company’s books, of the stockholder proposing such business, (y) the class and number of shares of the Company that are beneficially owned by the stockholder, and (z) any material interest of the stockholder in such business.

c.             Consequences of Failure to Give Timely Notice.  Notwithstanding anything in these By-Laws to the contrary, no business (other than the nomination and election of Directors) shall be conducted at any annual or special meeting except in accordance with the procedures set forth in this paragraph and, as an additional limitation, the business transacted at any special meeting shall be limited to the purposes stated in the notice of the special meeting pursuant to paragraph 4 of this Article I.  The presiding Officer of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this paragraph and, if the presiding Officer should so determine, the presiding Officer shall so declare to the meeting, and any such business not properly brought before the meeting shall not be transacted.

II.            ARTICLE II -- DIRECTORS

1.             Board of Directors

The business and property of the Company shall be managed by a Board of Directors of not less than seven (7) nor more than fifteen (15) persons.  The number may be changed from time to time by a resolution adopted by a majority of the entire Board of Directors.  Any change in the number of Directors shall be reported to the Missouri Secretary of State within 30 calendar days of such change.  Directors who are in the employ of the Company shall receive no additional compensation for their services as Directors.

2.             Election

The Directors shall be divided into three classes expiring in successive years at the Annual Meeting of Stockholders.  Directors shall be elected to hold office for a term of three years.  The Directors of each class shall hold office for the term for which elected and shall serve until their successors have been duly elected and qualified.  Each class shall be approximately equal as the Board of Directors may determine.  Newly created directorships and vacancies occurring for any reason may be filled by a vote of a majority of Directors then in office although less than a quorum.

3.             Meetings

Meetings of the Board of Directors may be held at such time and place as set by the Board of Directors and may be called by the Chairman of the Board, the Chief Executive Officer, the Chairman, or President, or by any two Directors.  At least 2 days notice of a meeting shall be given.  Meetings utilizing telephonic, videoconferencing or similar communications equipment may be held as permitted under Missouri Statutes.  At its first meeting following the Annual Meeting of Stockholders, the Board shall elect a member to act as Chair of its meetings.  Such person may, but need not, be designated Chairman of the Board and may, but need not, be an Officer or an employee of the Company.

4.             Board or Committee Action Without Meeting

Any action required or permitted to be taken at any meeting of the Board of Directors or any Committee of the Board may be taken without a meeting as permitted under Missouri Statutes.

5.             Quorum

A majority of the full Board of Directors or a majority of a full Committee shall constitute a quorum for the holding of a meeting of the Board or of such Committee.  A majority of those present shall decide any question that may come before a meeting of the Board or Committee with the following exceptions:

a.             The election of Officers of the Company and the appointment of members of Board Committees shall require a majority vote of the entire Board;

b.             Vacancies on the Board may be filled by the vote of a majority of Directors then in office although less than a quorum.

c.             A change in the number of Directors shall require a majority vote of the entire Board.

6.             Committees

The Board may, by resolution, establish such Committees as it deems necessary or appropriate.  Such Committees shall have and exercise the powers, responsibilities and duties set forth in the resolutions establishing them.  Each Committee shall have at least two members.  The Board shall have the power to fill vacancies and to change the size and membership of all Committees.  A majority of the members of a Committee shall constitute a quorum thereof and may fix the time and place of the Committee meetings.

III.           ARTICLE III -- OFFICERS

1.             Officers

The Board of Directors shall elect the Officers of the Company at the first meeting of the Board following the Annual Meeting of Stockholders.  The order of succession shall be as designated by the Board in the listing of the Officers in the Minutes of the meeting.  The Board may elect persons to the officerships set out below or leave any office vacant except persons must be elected to the offices of President and Secretary.  A person may be elected to more than one officership.  The Board may fill vacancies as they occur.  Each of the Officers shall have such powers as prescribed by the Board and Missouri Statutes and shall be elected for 1 year or until their successors are duly elected.

a.             Chief Executive Officer, who shall have overall direction of the affairs of the Company.

b.             President

c.             Chairman

d.             Vice Chairman

e.             Vice Presidents, one or more of whom may be designated Executive Vice Presidents or Senior Vice Presidents.

f.Secretary

g.Assistant Secretaries

h.Treasurer, who shall have general supervision over, and charge of all moneys and securities of the Company, and shall arrange for the financing of the Company's operations.

i.Assistant Treasurers

j.Controller, who shall keep a financial record of the business of the Company, developing and maintaining an accounting system to accomplish the proper recording, measuring and reporting of all financial operations and transactions and all assets and liabilities of the Company.

k.Assistant Controllers

D.            ARTICLE IV -- CAPITAL STOCK

1.             Certificate of Stock

Certificates of stock or other evidence of stock ownership shall be issued to each holder of fully paid stock.  The certificates or other evidence of stock ownership shall be executed or recorded in accordance with statutes or regulations signed by the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and sealed with the Corporate Seal.  In case any such Officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such Officer before such certificate is issued, such certificate may nevertheless be issued by the Company with the same effect as if such Officer had not ceased to be such Officer at the date of its issue.

2.             Transfer of Stock

Transfers of stock on the books of the Company, or otherwise, shall be as authorized by statute or regulation.

3.             Lost or Destroyed Certificates

Any Officer of the Company may order a new certificate of stock or other evidence of stock ownership to be issued in case of lost or destroyed certificates or evidence of stock ownership, but in every such case the owner shall make an affidavit or affirmation of the fact of such loss or destruction in form satisfactory to the Officer and shall give to the Company a bond of indemnity in form and in amount and with one or more sureties satisfactory to the Officer to indemnify the Company against any loss or claim that the Company may incur by reason of the issuance of a substitute stock certificate or other evidence of stock ownership. Said Officers may, in their discretion, refuse to replace any lost or destroyed certificate or evidence of stock ownership save upon the order of a court having appropriate jurisdiction.

4.             Record Date

The Board of Directors is authorized to fix in advance a date, not exceeding 70 days preceding the date of any meeting of or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of stock shall go into effect, as the record date for the determination of the stockholders entitled to notice of, and to vote at any such meeting, and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights or to exercise the rights to respect to any such change, conversion or exchange of stock in the manner and with the effect provided in statutes of the State of Missouri.  If the Board shall not have closed the transfer books or set a record date for the determination of its stockholders entitled to vote or entitled to such other right, then the date on which notice of the meeting is mailed or the date such dividend is declared or other right announced, as the case may be, shall be the record date for such determination of stockholders entitled to vote or to such other right.

5.             Treasury Stock

The Treasury Stock of the Company shall consist of such issued and outstanding stock of the Company as may be acquired by the Company, and shall be held subject to disposal by the Board of Directors.  Such stock shall neither vote nor participate in dividends while held by the Company.

ARTICLE V -- INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES

1.             The Company shall indemnify any person who is or was a Director or Officer of the Company against any and all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement incurred by the such person in connection with any civil, criminal, administrative or investigative action, suit, proceeding or claim (including an action by or in the right of the Company or a Subsidiary) by reason of the fact that such person is or was serving in such capacity; provided, however, that no such person shall be entitled to any indemnification pursuant to this subsection on account of: (i) conduct which is finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct, or (ii) an accounting for profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended from time to time, or pursuant to a successor statute or regulation.

2.             The Company may indemnify, to the extent that the Board of Directors deems appropriate and as set forth in a By-Law or resolution any person who is or was an employee or agent of this Company or any Subsidiary or who is or was serving at the request of the Company as a Director, Officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including any employee benefit plan) against any and all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement incurred by such person in connection with any civil, criminal, administrative or investigative action, suit, proceeding or claim (including an action by or in the right of the Company or a Subsidiary) by reason of the fact that such person is or was serving in such capacity; provided, however, that no such person shall be entitled to any indemnification pursuant to this subsection on account of: (i) conduct which is finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct; or (ii) an accounting for profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended from time to time, or pursuant to a successor statute or regulation.

3.             The Company may make advances, to the extent that the Board of Directors deems appropriate, for expenses, including attorneys’ fees, incurred prior to the final disposition of a civil, criminal, administrative or investigative action, suit, proceeding or claim (including an action by or in the right of the Company or a Subsidiary) to any person to whom indemnification is or may be available under this Article V; provided, however, that prior to making any advances, the Company shall receive a written undertaking by or on behalf of such person to repay such amounts advanced in the event that it shall be ultimately determined that such person is not entitled to such indemnification.

4.             The indemnification and other rights provided by this Article V shall not be deemed exclusive of any other rights to which a person to whom indemnification is or may be otherwise available under the Articles of Incorporation, the By-Laws or any agreement, vote of shareholders or disinterested Directors or otherwise. The Company is authorized to purchase and maintain insurance on behalf of the Company or any person to whom indemnification is or may be available against any liability asserted against such person in or arising out of such person’s status as a Director, Officer, employee or agent of the Company, any of its Subsidiaries or another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including an employee benefit plan) which such person is serving at the request of the Company.

5.             Each person to whom indemnification is granted under this Article V is entitled to rely upon the indemnification and other rights granted hereunder as a contract with the Company and such person and such person’s heirs, executors, administrators and estate shall be entitled to enforce against the Company all indemnification and other rights granted to such person by Article V.  The indemnification and other rights granted by Article V shall survive amendment, modification or repeal of this Article, and no such amendment, modification, or repeal shall act to reduce, terminate or otherwise adversely affect the rights to indemnification granted hereunder, with respect to any expenses, judgments, fines and amounts paid in settlement incurred by a person to whom indemnification is granted under this Article with respect to an action, suit, proceeding or claim that arises out of acts or omissions of such person that occurred prior to the effective date of such amendment, modification or repeal.

6.             For purposes of this Article V, “Subsidiary” shall mean any corporation, partnership, limited liability company, joint venture, trust or other enterprise of which a majority of the equity or ownership interest is directly or indirectly owned by the Company.

E.             ARTICLE VI -- DIVIDENDS AND FINANCE

1.             Dividends

The Board of Directors may declare, and the Company may pay, dividends on the outstanding shares of capital stock from time to time in the manner and subject to the terms and conditions provided under Missouri Law.

2.             Moneys

The moneys of the Company shall be deposited in such banks, trust companies or other financial institutions as the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer shall designate.

3.             Checks, Notes and Other Similar Obligations

Any one of the Officers of the Company is authorized and empowered to: make and endorse checks, drafts, and other instruments against funds of the Company; and to endorse, negotiate and sign on behalf of the Company certificates of stock, promissory notes, bills of exchange, letters of credit, and other financial instruments.

F.             ARTICLE VII -- SEAL

1.             Corporate Seal

The Corporate Seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Missouri."  The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.

IV.           ARTICLE VIII -- AMENDMENTS

1.             The Board of Directors of the Company is authorized to make, alter, amend or repeal By-Laws of the Company, not inconsistent with the Articles of Incorporation of the Company or with the laws of the State of Missouri.  By-Laws made by the Board of Directors may be altered or repealed, in whole or in part, by a majority of the entire outstanding stock of the Company, at any regular or special meeting of the stockholders where such action has been announced in the call and notice of the meeting.

D.            ARTICLE IX -- TENURE OF DIRECTORS

1.             No Director may stand for re-election after reaching his/her seventieth (70^th) birthday.  This provision however shall not require a Director to retire from the Board until the expiration of his/her term.

2.             Directors who are also Officers of the Company shall submit their resignation from the Board upon ceasing to be an Officer.  The Board may accept or not accept the Officer’s resignation as a Director as it sees fit.

3.             Directors who are not Officers shall submit their resignation from the Board upon resigning, separating or retiring from their primary employment.  The Board may accept or not accept the resignation of the Director as it sees fit.

EX-19

EXHIBIT 19 - FINANCIAL STATEMENTS - UNAUDITED

BEMIS COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(in thousands, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2001		2000		2001		2000
Net sales	$	575,570	$	542,780	$	1,734,534	$	1,592,728
Costs and expenses:
Cost of products sold	458,000		433,904		1,377,453		1,262,234
Selling, general, and administrative expenses	47,476		46,020		156,514		144,788
Research and development	3,042		2,374		8,230		7,398
Interest expense	7,017		8,178		25,942		20,284
Other costs, net	1,298		198		1,862		922
Minority interest in net income	176		141		396		344
Income before income taxes	58,561		51,965		164,137		156,758
Provision for income taxes	22,500		19,800		62,900		59,600
Net income	$	36,061	$	32,165	$	101,237	$	97,158
Basic earnings per share of common stock	$	.68	$	.61	$	1.92	$	1.82
Diluted earnings per share of common stock	$	.68	$	.60	$	1.91	$	1.81
Cash dividends paid per share of common stock	$	.25	$	.24	$	.75	$	.72
Weighted-averaged common shares and
common stock equivalents outstanding	53,203		53,643		53,028		53,649

See accompanying notes to consolidated financial statements.

BEMIS COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(dollars in thousands)

	September 30,			December 31,
ASSETS	2001			2000
Cash	$	34,210		$	28,910
Accounts receivable - net	301,430			301,974
Inventories	276,834			274,323
Prepaid expenses and deferred charges	30,783			34,752
Total current assets	643,257			639,959
Property and equipment, net	858,236			825,754
Goodwill	330,378			297,898
Intangible assets, deferred charges, and other assets	145,448			125,032
Total	475,826			422,930
TOTAL ASSETS	$	1,977,319		$	1,888,643
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt	$	1,270		$	227,459
Short-term borrowings	4,203			7,353
Accounts payable	194,237			207,115
Accrued salaries and wages	41,361			43,661
Accrued income and other taxes	35,190			9,509
Total current liabilities	276,261			495,097
Long-term debt, less current portion	663,386			437,952
Deferred taxes	118,677			103,621
Other liabilities and deferred credits	61,098			51,646
Total liabilities	1,119,422			1,088,316
Minority interest	1,977			1,570
Stockholders' equity:
Common stock issued and outstanding (61,195,954 and 60,972,802 shares)	6,119			6,097
Capital in excess of par value	242,335			237,100
Retained earnings	916,129			854,506
Other comprehensive loss	(58,346		)	(49,855		)
Common stock held in treasury at cost (8,400,388 and 8,370,388 shares)	(250,317		)	(249,091		)
Total stockholders' equity	855,920			798,757
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,977,319		$	1,888,643

See accompanying notes to consolidated financial statements.

BEMIS COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30,
	2001			2000
Cash flows from operating activities
Net income	$	101,237			$	97,158
Non-cash items:
Depreciation and amortization	94,774				79,985
Minority interest in net income	396				344
Deferred income taxes, non-current portion	6,871				3,618
Losses of unconsolidated affiliated companies	2,599				1,742
Tax benefits related to stock incentive programs	1,400				841
Loss (gain) on sale of property and equipment	492				(7		)
Changes in working capital, net of effects of acquisitions and dispositions	21,253				(30,967		)
Net change in deferred charges and credits	(4,672		)		(2,015		)
Net cash provided by operating activities	224,350				150,699
Cash flows from investing activities
Additions to property and equipment	(91,573		)		(74,292		)
Business acquisitions	(72,614		)		(294,103		)
Proceeds from sale of property and equipment	636				402
Other					36
Net cash used in investing activities	(163,551)				(367,957		)
Cash flows from financing activities
Change in long-term debt excluding debt assumed in business acquisitions	215,044				128,635
Change in short-term debt	(229,287		)		165,095
Cash dividends paid	(39,614)				(38,377		)
Subsidiary dividends to minority stockholders					(51		)
Common stock purchased for the treasury	(1,226		)		(25,065		)
Stock incentive programs	(1,400		)		(841		)
Net cash (used) provided by financing activities	(56,483		)		229,396
Effect of exchange rates on cash	984				(2,818		)
Net increase in cash	$	5,300			$	9,320
Cash balance at beginning of year	28,910				18,187
Cash balance at end of period	$	34,210			$	27,507

See accompanying notes to consolidated financial statements.

BEMIS COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

								Accumulated OtherComprehensiveIncome (Loss)
			Capital In Excess Of Par Value								Common Stock Held In Treasury			TotalStockholders Equity
(dollars in thousands, except per share amounts)	Common Stock				Retained Earnings
Balance at December 31, 1998	$	5,906	$	181,908	$	708,362		$	(6,116	)	$	(202,206	)	$	687,854
Net income for 1999					114,775									114,775
Translation adjustment for 1999								(24,353		)				(24,353		)
Pension liability adjustment, net of $(536) tax benefit								(175		)				(175		)
Total comprehensive income														90,247
Cash dividends paid on common stock $.92 per share					(48,126		)							(48,126		)
Stock incentive programs and related tax effects	4		49											53
Purchase of 122,599 shares of common stock											(4,133		)	(4,133		)
Balance at December 31, 1999	5,910		181,957		775,011			(30,644		)	(206,339		)	725,895
Net income for 2000					130,602									130,602
Translation adjustment for 2000								(19,178		)				(19,178		)
Pension liability adjustment, net of $(642) tax benefit								(33		)				(33		)
Total comprehensive income														111,391
Cash dividends paid on common stock $.96 per share					(51,107		)							(51,107		)
1,730,952 shares of common stock issued in
acquisition of minority interest	173		54,676											54,849
Stock incentive programs and related tax effects	14		467											481
Purchase of 1,460,900 shares of common stock											(42,752		)	(42,752		)
Balance at December 31, 2000	6,097		237,100		854,506			(49,855		)	(249,091		)	798,757
Net income for first nine months of 2001					101,237									101,237
Translation adjustment for the first nine months of 2001								(8,491		)				(8,491		)
Total comprehensive income*														92,746
Cash dividends paid on common stock, $.75 per share					(39,614		)							(39,614		)
Stock incentive programs and related tax effects	22		5,235											5,257
Purchase of 30,000 shares of common stock											(1,226		)	(1,226		)
Balance at September 30, 2001	$	6,119	$	242,335	$	916,129		$	(58,346	)	$	(250,317	)	$	855,920

*Total comprehensive income for the third quarters of 2001 and 2000 was $37,219 and $27,258, respectively, and was $85,109 for the first nine months of 2000.

See accompanying notes to consolidated financial statements.

BEMIS COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation

                The accompanying unaudited consolidated financial statements have been prepared by Bemis Company, Inc. (the Company) 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 operations.  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.

                During 2000, the Financial Accounting Standards Board (FASB) through its Emerging Issues Task Force (EITF) reached a consensus that amounts billed for shipping and handling should be included in revenue and costs incurred by the seller for shipping and handling should be classified as cost of products sold.  Accordingly, net sales and cost of products sold have been restated.  Previously, the Company had recorded both revenue and costs of shipping and handling in net sales.

                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, 2000.

Note 2 - New Accounting Pronouncements

                In July 2001, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 141, “Business Combinations” and SFAS No. 142 “Goodwill and Other Intangible Assets”.  SFAS No. 141 requires that the purchase method be used for business combinations initiated after June 30, 2001.  SFAS No. 142 requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment.  The provisions of SFAS No. 142 are effective for fiscal years beginning after December 15, 2001, and any business combination initiated after June 30, 2001.  In January of 2002, the Company will adopt the reporting requirements of SFAS No. 142 and has applied its requirements to the purchase of Duralam, Inc. which was accomplished September 7, 2001.  Based upon the Company’s current understanding of the standard and a preliminary assessment of recorded goodwill and intangible assets, had the standard been in effect January 1, 2001, the Company estimates that the full year 2001 impact would have been approximately $0.16 of additional diluted earnings per share.

                Effective January 1, 2001, the Company adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 138.  This new accounting standard requires that all derivative instruments be recorded on the balance sheet at fair value and establishes criteria for designation and effectiveness of hedging relationships.  The effect of adopting this standard was not material to the Company’s consolidated financial statements.  Upon adoption, the Company recorded the immaterial impact as interest expense.

Note 3 - Interest Rate Swap Transaction

                During the third quarter 2001, to obtain greater access to short-term floating-rate debt, while minimizing refinancing risk through the issuance of long-term, fixed-rate debt, the Company entered into long-term interest rate swap agreements for a total notional amount of $350.0 million.  These interest rate swap agreements have been designated as hedges of changes in the fair value of the Company’s $350.0 million fixed rate long-term debt obligations ($100.0 million, 6.7 percent debt due July 1, 2005, and $250.0 million, 6.5 percent debt due August 15, 2008).  Counterparties to these agreements are major financial institutions who also participate in the Company’s bank credit facilities.  Credit loss from counterparty non-performance is not anticipated.

                Under these interest rate swap agreements the Company will receive a fixed rate of interest and pay a variable rate of interest over the term without the exchange of the underlying notional amounts. The fixed rate of interest, which the Company will receive, is equal to the interest rate of the Company’s long-term debt which is being hedged.  The variable rate of interest which the Company will pay is based on the six-months London Interbank Offered Rate, set in arrears, (LIBOR) plus a fixed spread which is unique to each agreement.  The variable rates are reset semiannually at each net settlement date.  Currently, the Company is “in-the-money” and has recorded the net settlement receivable as a reduction in interest expense.

                The terms of the interest rate swap agreements have been specifically designed to conform with the applicable terms of the hedged items and with the requirements of paragraph 68 of SFAS No. 133 to support the assumption of no ineffectiveness (changes in fair value of the debt and the swaps exactly offset) and simplify the computations necessary to make the accounting entries.  At September 30, 2001, the fair value of these interest rate swaps, $10.5 million as determined by the respective financial institutions using discounted cash flow or other appropriate methodologies, is included with intangible assets, deferred charges, and other assets with a corresponding increase in long-term debt.

Note 4 - Acquisition of Duralam, Inc.

                On September 7, 2001, the Company purchased all outstanding stock of Duralam, Inc., which had annual sales of approximately $55.0 million, for a cash purchase price of approximately $69.0 million.  Duralam manufactures films for packaging meat, cheese, candy, and other food products at facilities in Appleton and Neenah, Wisconsin.  The total cash purchase price has been accounted for under the purchase method of accounting with preliminary entries reflecting the provision of SFAS No. 141 and SFAS No. 142 regarding such acquisitions initiated after June 30, 2001.  Results of operations subsequent to September 7, 2001, are included in these financial statements.

Note 5 - Segments of Business

                The Company’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 Company 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 Company’s business activities reported by its two business segments follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Business Segments  (in millions)	2001			2000			2001			2000
Net Sales to Unaffiliated Customers:
Flexible Packaging	$	456.7		$	420.6		$	1,365.2		$	1,214.9
Pressure Sensitive Materials	118.9			122.2			369.4			377.9
Intersegment Sales:
Flexible Packaging							(0.1		)	(0.1		)
Pressure Sensitive Materials
Total	$	575.6		$	542.8		$	1,734.5		$	1,592.7
Operating Profit and Pretax Profit:
Flexible Packaging	$	70.1		$	53.9		$	204.2		$	158.4
Pressure Sensitive Materials	2.1			6.8			6.5			32.3
Total operating profit	72.2			60.7			210.7			190.7
General corporate expenses	(6.4		)	(0.4		)	(20.3		)	(13.3		)
Interest expense	(7.0		)	(8.2		)	(25.9		)	(20.3		)
Minority interest in net income	(0.2		)	(0.1		)	(0.4		)	(0.3		)
Income before income taxes	$	58.6		$	52.0		$	164.1		$	156.8
Identifiable Assets:
Flexible Packaging							$	1,549.1		$	1,472.4
Pressure Sensitive Materials							354.3			360.0
Total identifiable assets							1,903.4			1,832.4
Corporate assets							73.9			46.9
Total							$	1,977.3		$	1,879.3

Note 6 - Inventories

                The Company’s inventories are valued at the lower of cost, determined by the first-in, first-out (FIFO) method, or market.  Inventories are summarized as follows:

	September 30,		December 31,
(in thousands)	2001		2000
Raw materials and supplies	$	82,006	$	84,867
Work in process and finished goods	194,828		189,456
Total inventories	$	276,834	$	274,323

Note 7 - Taxes Based On Income

                The Company's 2001 effective tax rate of 38% differs from the federal statutory rate of 35% primarily due to state and local income taxes.

Note 8 - Earnings Per Share Computations

	Three Months Ended  September 30,				Nine Months Ended September 30,
	2001		2000		2001		2000
Income available to common stockholders (numerator)	$	36,061,000	$	32,165,000	$	101,237,000	$	97,158,000
Weighted-average common shares outstanding (denominator)	52,821,001		53,141,641		52,812,044		53,251,519
Basic earnings per share of common stock	$	0.68	$	0.61	$	1.92	$	1.82
Dilutive effects of stock option and stock awards, net of windfall tax benefits	381,976		501,668		215,896		397,010
Weighted-average common shares and common stock equivalents outstanding (denominator)	53,202,977		53,643,309		53,027,940		53,648,529
Diluted earnings per share of common stock	$	0.68	$	0.60	$	1.91	$	1.81

                Certain options outstanding at September 30, 2001 and 2000, (155,000 shares and 625,199 shares, respectively) were not included in the computation of diluted earnings per share because they would not have had a dilutive effect.